Q&A: NRST for Expectant Parents and Parents of Newborns Experiencing Financial Hardship

Question: 

May a state use TANF funds to provide a payment to an expectant parent before the birth of a child to cover costs associated with the preparing for a new child? Could the state have a similar allowance but after the child is born? If allowable, must the family meet a financial eligibility standard to qualify for such a payment?
 

Answer: 

Yes, a state could use federal TANF funds to provide a non-recurrent, short-term benefit (NRST) to help with the unmet costs associated with a pregnancy or preparing for a new child in a household. To meet the regulatory requirements of a NRST, the benefit must: (1) be designed to deal with a specific crisis situation or episode of need; (2) not be intended to meet recurrent or ongoing needs; and (3) not extend beyond four months. 45 CFR § 260.31(b).

Because such a benefit would meet TANF Purpose One (to provide assistance to needy families so that children may be cared for in their own homes or the homes of relatives), there must be financial eligibility criteria for a family receiving it. Immigration status requirements relevant to TANF benefits also need to be satisfied.

As noted above, the first NRST criterion is that there must be a specific episode of need or crisis situation. While childbirth itself would not constitute a specific episode of need, an expectant parent could have an episode of need that arises from the pregnancy, as could a family with a newborn child. To ensure it is complying with this requirement, a state should determine eligibility for the benefit on an individual basis. Thus, only families with a demonstrated episode of need and whose incomes are within the financial eligibility criteria could receive TANF-funded benefits. The state could design an application for a TANF-funded NRST to allow the applicant to document the episode of need that the family is experiencing due to the pregnancy or birth, with opportunity for a family to identify the immediate financial hardships and needs meeting TANF Purpose One. For example, they might need safe sleeping equipment for baby, a car seat, home baby-proofing items, or have other increased expenses in the growing family. This could happen when the state conducts its initial needs assessment.

The state must also structure the TANF NRST in such a way that it meets the second and third requirements for a NRST — that it should not be intended to meet recurrent or ongoing needs and will not extend beyond four months. That means that the TANF-funded NRST should not simply be the first four months of a longer time frame. For example, the state could create a phased program and TANF could fund a single phase that does not extend beyond four months. If the state chooses, it could have subsequent phases (funded separately) that begin during the fifth month that should be distinct in nature from the TANF NRST.

We know that there are some programs that want to provide both payments described in the question for the same family, first during the pregnancy and then once the newborn arrives. The two payments could not be funded with TANF as a single NRST. The state could conceivably structure two different NRST benefits, with different, distinguishable episodes of need addressing different family necessities.

We remind states that the Income and Eligibility Verification System applies to any applicant for or recipient of benefits under the TANF program where income or citizenship/immigration status is a condition of eligibility.

NRST for Expectant Parents and Parents of Newborns Experiencing Financial Hardship (PDF)