Q & A: Definition of Assistance

Definition of Assistance

Q1: Do benefits and services such as medical services,1 medical and nonmedical substance abuse treatment, and allowances to cover special (non-basic) needs of disabled children fall within the definition of assistance or are they excluded from the definition? Must a family be employed to exclude these items from the definition of assistance?

A1: These kinds of services are not assistance because they do not address a family's basic needs (as defined under prior law), and they are not supportive services within the meaning of §260.31(a)(3)2. Thus, they would not be considered assistance, even for unemployed families.

¹States may not use Federal TANF funds for medical services, except pre-pregnancy planning services.
²The supportive services that would be assistance for unemployed families include child care, transportation, and payments to cover other participation expenses, such as meal allowances and uniforms.

Q2: Is there a definition of employment for the purpose of the deciding which support services are in the definition of assistance?

A2: There is no Federal definition. The intent is to exclude supportive services when they are provided to a family with an individual who has a job and is earning wages or some other form of bona fide income. Within that general context, States may decide what standards to apply (e.g., with respect to minimum hours of work during the week or month or minimum income for self-employed individuals). It is important that States provide this definition to the public so that families and service providers understand the implications for families receiving program benefits. It is also important that the definition be clearly articulated in State policy so that program staff, auditors, and others will apply the policy consistently and equitably. Not all supportive services provided to unemployed families count as assistance. A State may continue supportive services that would otherwise be considered assistance to a family during a temporary period of unemployment. Such services would fall under the exclusion for nonrecurrent, short-term benefits.

Q3: Are State (non-IV-E) foster care payments carried over from the former EA program regarded as assistance? ^3,4

A3: In answering this question, it is important to distinguish State (non-IV-E) foster care maintenance payments from other types of services designed to ensure a successful outcome for the child. Ongoing, recurrent payments to meet a child's basic needs (i.e., foster care maintenance payments that cover food, clothing, and shelter needs) would constitute assistance. Thus, families receiving these benefits would be subject to the TANF case-record reporting requirements. However, most of these families would not be subject to work requirements or time limits because there would be no adult receiving assistance.

Foster care services that do not provide basic income support -- like case management, family counseling, parenting education and training, or other similar support activities to normalize family functioning -- would not constitute assistance. Thus, families receiving such services would not be subject to the TANF reporting, time limit, or work requirements.

³While foster care payments are not generally allowable under TANF, States that provided such benefits under an approved plan as of September 30, 1995 (or August 21, 1996, at State option), may use Federal funds for such purposes under section 404 (a)(2) of the Act.

⁴See Q3-Q6 in "Use of Funds" section for related discussion.

Q4: Is an earned income disregard "assistance"?

A4: No, an income disregard is part of a formula that a State might use for computing a family's benefit amount. Any payment that a family receives as the result of an income disregard would normally fall within the definition of assistance, because such a benefit would normally be designed to address a family's basic needs. States use earned income disregards to recognize that working families have special expenses that reduce the amount available to cover their basic needs. By applying disregards, States count less of a family's income and increase the amount of cash assistance provided. If a State provides an employed family direct compensation or an allowance for its employment-related expenses, e.g., for child care, transportation, uniforms, work tools, or other employment-related costs, such a benefit would not constitute assistance.

Q5: A State diverts TANF and Food Stamp benefits to reimburse an employer to cover part of the wages paid to a TANF work program participant. The participant receives wages from the employer in lieu of TANF and Food Stamp benefits. May the State classify this subsidized employment as a work subsidy? Are the diverted benefits excluded from the definition of assistance?

A5: If a State diverts the client's TANF benefit and Food Stamp benefit to the client's employer to pay part of the client's wages, then the TANF benefit is not considered assistance. TANF benefits used to subsidize the client's wages clearly fit within the "work subsidies" exclusion at §260.31(b)(2).

Q6: How does the new definition of assistance affect child support assignment and the distribution of collections?

A6: Under the statute and rules, families must assign any rights they have to support as a condition of receiving assistance under the TANF program. The new definition of assistance under §260.31 does not affect the scope of the assignment of child support. However, it has the effect of limiting the amount of assigned support collections the State may retain to reimburse assistance provided to the TANF family. Only those benefits that a family receives that are within the definition of assistance under §260.31 may be reimbursed with assigned support collectionsUnder §260.31(a), assistance includes cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing needs. It also includes supportive services such as transportation and child care provided to families who are not employed. Paragraph (b) of §260.31 excludes certain benefits from the definition of assistance, for example, certain nonrecurrent, short-term benefits and supportive services such as child care and transportation provided to families who are employed.

The Office of Child Support Enforcement has updated its policy guidance to incorporate the new TANF definition of assistance (see OCSE-AT-99-10). According to that guidance:

For consistency with the definition of "assistance" for TANF purposes under §260.31, OCSE revised the definitions of "assistance from the State" for TANF purposes and "assistance paid to the family" for child support enforcement purposes." "Assistance paid to the family" for child support distribution purposes must meet both of the following tests: both of the following two tests:(1) Is it considered "assistance" from the State under the TANF program? "Assistance paid to the family" includes only payments for benefits and services that are included in the definition of assistance at §260.31. For example, the TANF definition of "assistance" includes supportive services, such as transportation and child care provided to families who are not employed, but excludes these same services from the definition of assistance, under §260.31(b), when provided to families who are employed.(2) Is it assistance "paid to the family?" "Assistance paid to the family" includes only assistance, as defined in §260.31, that is in the form of money payments in cash, checks, or warrants immediately redeemable at par to eligible families under a State plan approved under title IV-A.The amount of "assistance paid to the family" that has not been reimbursed by assigned support collections is used to calculate the total amount of "unreimbursed assistance" or "URA" defined in OCSE-AT-98-24 as:

"UNREIMBURSED ASSISTANCE or URA. - The term 'unreimbursed assistance' means the cumulative amount of assistance paid to the family for all months which has not been repaid by assigned support collections. The total amount of unreimbursed assistance paid to the family that a State may recover through the IV-D program is limited by the total amount of the assigned support obligation."

TANF assistance assistance provided not as a money payment to the family, but in a different form (e.g., as a housing or child care voucher, food coupon, or in-kind benefit), is not considered "assistance paid to the family" and subject to recovery by the State unless it: (1) is paid in that form at the voluntary request of the TANF recipient; and (2) would otherwise be available as a money payment to the recipient.

Q7: If a State pays incentives or bonuses, e.g., to reward teens for avoiding pregnancy or to reward needy parents for staying employed, would such benefits be considered assistance?

A7: In responding to this question, we assume that the State is providing incentives or bonuses to encourage or reward particular behaviors or outcomes, rather than to meet ongoing basic needs or participation-related expenses. Under these circumstances, the incentives and bonuses would not constitute assistance.

Q8: The definition of assistance in the regulation (§260.31) excludes supportive services "such as" transportation and child care provided to families who are employed. The guidance in the TANF Data Report (preceding data element # 21) uses this same language. Is the exclusion for work supports limited to child care and transportation alone or are other supportive services for employed families also outside the definition of assistance?

A8: The exclusion is not limited to child care and transportation. Under the regulations, no supportive services provided to families who are employed would be considered to be assistance. The TANF Data Report applies the same definition of assistance as the regulations. Please refer to the second footnote to Q1 in this section (on the "Definition of Assistance") for further information on when supportive services provided to unemployed families constitute assistance.

Q9: Does a State have flexibility to establish the period of time it will look at in determining if a family is employed (i.e., for the purpose of determining whether the support services it provides a family constitute "assistance")?

A9: Under their TANF programs, States have the flexibility to determine: (1) the period of time they will look at in deciding whether a family is "employed"; and (2) the method and the frequency with which they determine whether there has been a change in family circumstances, such as employment status.⁵ For example, States could look at the prior month or current month in making an initial determination that a family is employed. States may also look at the family's employment situation over a longer period of time to see whether the family is experiencing a special episode of need for which child care or transportation constitutes a nonrecurrent, short-term benefit, rather than assistance. Similarly, once a State authorizes child care or transportation for an employed family, it has flexibility in deciding what type of employment disruptions would constitute a change in family circumstances and how it would find out about such a change. For example, States have options to use periodic (e.g., quarterly) or exception-based reporting (or both). In setting their policies and procedures, States should consider a variety of factors. To support the employment objectives of TANF, they should minimize the administrative burdens on working families and coordinate the procedures and benefits available through related assistance programs that also provide work supports (e.g., child care, Medicaid, and Food Stamps). They should design policies that accommodate temporary disruptions in employment and facilitate job re-entry. They should work to avoid unnecessary disruptions in child care services because continuity of care is important not just for sustaining work, but also for the healthy development of children. And they should ensure that the fiscal integrity of the program is maintained.

⁵States also have flexibility to define who is an "employed" family for this purpose. See Q2 in this section.

Q10: If an individual receives a TANF-funded loan to meet his/her ongoing needs, would such a benefit be considered "assistance"?

A10: No. The recipient of a loan must repay the funds received. In this circumstance, the individual would not be receiving "assistance."