Thursday, April 2, 2020

Send Cash to Hardest-Hit Families

Even though Indiana has only been actively combatting the COVID-19 pandemic for about a month, most of us have come to the stark realization that the effects of this crisis will be with us for quite some time after the outbreak ends. This is especially true for low-income Hoosiers who already lacked financial stability before the outbreak began. At the Institute, we are particularly concerned about the Hoosier families in deep poverty who are going to suffer the most, struggle to recover, and are likely to increase in number.

Luckily, Indiana already has a program in place with the capability of getting some quick, short-term relief to families who are most in need. Congress expressly designed the Temporary Assistance for Needy Families (TANF) program to meet the needs of these families. During the COVID crisis, Indiana has already made some changes to the administration of the TANF program to protect its recipients, such as waiving work and job search requirements - both crucial changes right now.  However, the TANF program provides us with another tool in our crisis-fighting toolbox: a provision called “non-recurrent, short-term (NRST) benefits.”  

Essentially, that means that in times of crisis, we can send a rapid support directly to families. These benefits are short term in that they cannot last longer than four months and can be cash or services paid directly from TANF. For example, in the past Colorado used NSRT for child care, transportation assistance, and job readiness. Texas used it for kinship care and clothing allowance and at least five states, including Utah used it for emergency cash assistance.[i] The benefits are extremely flexible and are perfect for helping bolster the finances of our most vulnerable families during this crisis. 

While safeguards are in place to stop the most damaging impacts of the COVID-19 crisis from happening right away, such as eviction and utility shut off moratoriums, bills will still accumulate throughout this crisis – and in fact, could increase temporarily as families rely on their utilities throughout the day or work to meet the needs of children home from school. The need for funds will not diminish over time. Additionally, our most vulnerable Hoosiers likely have no cushion available as they wait for federal benefits to arrive – and may be unlikely to receive the stimulus payments Congress just passed altogether.[ii]

A newly-published research study using survey data from low-income service workers with children suggests that financially vulnerable families need the cash infusion immediately. These adults report sleeping poorly, struggling with feelings of anxiety and depression, and seeing increasing signs of distress in their children. They also reported accessing few or no services in the first month of the COVID-19 crisis, even though many – like emergency childcare, free school meal pick-up, and distance learning – were available. One in five respondents predicted they would run out of rent money in less than a week.

With this sense urgency in mind, the Indiana Institute for Working Families has recommended to the Indiana Family and Social Services Administration that they use Indiana TANF funds to provide additional cash payments for up to four months to SNAP households with children, as allowed by the NRST provision within the TANF program. Providing these benefits to SNAP households would likely cover TANF household as well, but if for some reason a TANF household is not on SNAP, they should be included as well. Based on 2018’s $50 million TANF surplus, we estimate that the 125,000 SNAP households with children could receive $400/month for four months. If funds are too limited, then this could be targeted to all TANF households. Assuming a $50 million TANF surplus, this would equal $2400/month for four months for each of the 5,340 TANF households.

Looking to the future, it is critical to consider using TANF more effectively to meet the needs of our most vulnerable households.  Indiana’s TANF program has been providing cash assistance and services to too few families for years. We have seen an 82% decline in the number of TANF families participating in the program just since 2010! The reasons seem to be a combination of a stringent application process, extremely low income eligibility (16% of the Federal Poverty Guidelines) and a paltry cash benefit: the average benefit per family is less than $194/month; these benefit levels haven’t been updated since 1988. In the 2021 legislative session, we must increase eligibility and benefits so that fewer families are destitute, and also, when we are supporting more families through TANF, it will be easier to assist them during the next crisis.

Now more than ever, Hoosiers recognize that we are all connected and that financial stability and both personal and public well-being go hand in hand. Unfortunately, for too long, we have not focused enough attention on the tools at our disposal to ensure that all families can meet their basic needs and feel secure about the future. Making better use of these tools – now, and in the future – will allow more Hoosiers to get and stay well.

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