The number of Kentucky families receiving cash assistance has declined dramatically since federal welfare reform was enacted twenty years ago.
According to a study conducted by Marketplace and the Center for Budget and Policy Priorities, in 2014 there were 29,034 households utilizing the Temporary Assistance for Needy Families (TANF) program, compared to 66,664 in 1997.
Meanwhile the number of families with children in poverty decreased by only about 6,000 over the same period — from 131,326 down to 124,420.
The 1996 welfare reforms created limits for how long people can receive cash assistance and also required beneficiaries to look for a job or go to school. Before the reforms, states gave cash assistance to most who were eligible.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, says the steeper requirements have reduced the number of people using the program.
“There’s not a recognition that there have to be jobs for people to get and there also have to be good jobs,” Bailey said. “There are certain parts of the United States and parts of Kentucky, especially rural Kentucky, where there’s just a scarcity of jobs.”
Before welfare reform, the amount of federal welfare funds distributed to states each year varied based on need. Since then, the program has been capped at $16.5 billion and states each receive a block grant, which is distributed across several programs.
States have discretion as to how to distribute welfare dollars within a handful of programs, as long as they meet federal guidelines.
In Kentucky’s case, $132 million goes to cash assistance; $53 million to job preparation; $31.4 million to child care; $11.3 million to administrative support; and $30.3 million to other programs.
The amount of money going to cash assistance has gone down since 1997, when Kentucky spent almost $167 million on the program.
“It means less money is available for cash assistance, which is really important for people who are out of work, don’t have another income source and are trying to raise kids,” Bailey said.
States have discretion over how to distribute welfare dollars and it varies widely from state to state how funds are doled out.
According to the study, Alaska spends 91 percent of its TANF dollars on cash assistance, promoting work, and providing child care. Meanwhile, South Carolina spends 16 percent on those categories and 77 percent on a minimally defined “other” category.