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New Publication: Making Change with Incremental Steps: Modifying Adverse Incentives to Serving People with Disabilities in the TANF Program

by User Not Found | Mar 14, 2014

Prepared by: Nanette Goodman, Michael Morris

Burton Blatt Institute at Syracuse University

Introduction
The federally funded Supplemental Security Program (SSI) is the main program aimed at low-income people with disabilities, providing cash assistance with no time limit.  A major criticism of the program, however, is that it includes work disincentives that trap its recipients in poverty.  To the extent that low-income people with disabilities can find alternative programs without such disincentives, they can escape this trap.  One such possibility for parents with disabilities is the Temporary Assistance to Needy Families (TANF) program.

TANF is designed specifically to try to avoid work disincentives that create a barrier to exiting poverty.  It provides temporary financial assistance, employment supports and related services to help low-income parents transition from welfare to work and self-sufficiency.  Although the program is not specifically targeted to people with disabilities, estimates suggest that between 19 and 44 percent of TANF families include a parent with a disability. 

Used appropriately, the TANF program could possibly provide an early intervention mechanism to provide a plethora of needed services to recipients with disabilities before they sever ties with the labor force and slow the transition to long-term income support via SSI.  This paper explores the viability of TANF, as it is currently structured, to serve this role for parents, keeping in mind that for those whom TANF proves unsuccessful, SSI still remains available as a final safety net.
This paper reviews the structure of the TANF program, the rules that limit its effectiveness and recommendations to mediate these adverse incentives.  This is a particularly opportune time to modify the federal TANF rules to encourage states to provide more effective support for people with disabilities and minimize their reliance on SSI for three reasons.  

  • The number of SSI recipients who have qualified on the basis of a disability has more than doubled since 1990, putting financial stress on the program, and evidence suggests that elements of TANF directly affect SSI participation among women and children (Schmidt 2013).
  • HHS has indicated its willingness to provide waivers that will allow states to experiment with TANF work requirements.
  • In order to comply with The Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973, state TANF programs must ensure that individuals with disabilities have access to assistance and appropriate employment-related services, and that individuals who need accommodations with respect to the work participation requirements must be given those accommodations. 
Section 2 provides an overview of the TANF program and the particular federally defined features that create adverse incentives for the states to provide high quality services for people with disabilities. Section 3 discusses the implications of those adverse incentives. Unfortunately, as is explained in more detail below, state TANF programs face incentives that hinder their provision of needed services and encourage states to shift people that meet SSI eligibility requirements onto the federally funded SSI program as quickly as possible. Section 4 thus provides recommendations to revise the program so it works more effectively to help all low income parents, including those with disabilities, achieve self-sufficiency.  

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