Background Information about the TANF Emergency Fund

Publication Date: August 8, 2012

Background Information about the TANF Emergency Fund

The TANF Emergency Fund is authorized under the American Recovery and Reinvestment Act. It provides up to $5 billion to states, tribes, and territories through September 30, 2010. Emergency Funds are available to reimburse these jurisdictions for 80 percent of the cost of increased spending in three areas:

  • basic assistance, i.e., cash or non-cash intended to meet ongoing basic needs for low-income families with children;
  • non-recurrent short-term benefits, i.e. benefits or services that are designed to deal with a specific crisis situation or episode of need; are not intended to meet recurrent or ongoing needs; and will not extend beyond four months; and
  • subsidized employment for low-income parents and youth.

Under the law, every eligible jurisdiction is eligible to receive up to 50 percent of its annual grant under the Temporary Assistance for Needy Families block grant program, subject to the availability of funds in the Emergency Fund. In order to receive funds, the jurisdiction must demonstrate increased spending in a quarter over the comparable quarter in the base year – either fiscal year 2007 or fiscal year 2008 – in one or more of the three specified categories. If the jurisdiction demonstrates increased spending over the base year quarter, the jurisdiction qualifies for 80 percent reimbursement of the increased costs.

Sources for the Increased Spending: A jurisdiction’s increased spending can come from federal TANF funds or qualified State expenditures (known as maintenance-of effort or MOE expenditures). No federal funds other than TANF funds can qualify as part of the increased spending. MOE expenditures can come from state funds or (with the appropriate agreements): local funds, contributions from foundations or other third parties, and in some circumstances, expenditures from other third parties, such as non-profit organizations providing non-recurrent benefits or employers contributing to the costs of a subsidized jobs program. As a general rule, to qualify as MOE, expenditures cannot have originated from funds provided by another federal program or be expenditures from state funds that are made as a condition of receiving federal funds under another program.

Eligibility Requirements for Individuals served by the TANF Emergency Fund: Expenditures under the fund must be for needy families with children or pregnant women, but beneficiaries are not limited to families receiving TANF assistance. A jurisdiction has broad discretion in determining the income level at which a family is considered needy; for example, the jurisdiction may set income eligibility at a jurisdiction-determined multiple of the poverty line. Expenditures can also be made for noncustodial parents of needy children, and under some circumstances, for young adults who are not parents or minor children.

Eligible categories for Emergency Fund Awards: Jurisdictions can pay for a wide range of benefits and services within the three categories.

  • Basic assistance will principally be used for increased costs due to increased numbers of families receiving TANF assistance during the economic downturn.
  • Non-recurrent short term benefits can be used for a broad range of benefits and services, including emergency help to pay rent, utilities, other housing-related costs; short-term food assistance; domestic violence services; mental health and substance abuse treatment; short-term education and training; vehicle repair; and back-to-school allowances.
  • Subsidized employment can be in the private sector, in non-profit organizations or in government. Jurisdictions may choose to subsidize all or part of the wages of a subsidized employee, and may determine the length of the subsidy period. The expenditure can be for a newly-created job or to prevent a layoff in an existing job, so long as the jurisdiction ensures that it complies with requirements against displacement of other workers, and ensures that the expenditures are furthering the purposes of TANF, i.e., by providing a job opportunity to a needy parent or youth person that wouldn’t otherwise exist. A jurisdiction can include employer costs for supervision and training in its costs for purposes of qualifying for 80 percent federal reimbursement, and HHS will allow the jurisdiction to count as employer supervision and training costs an amount of up to 25 percent of the individual’s wages without requiring special documentation. This means, for example, that if a jurisdiction fully subsidizes a $10 wage, an employer share of $2.50 for supervision and training can be counted toward the jurisdiction’s costs without additional documentation, resulting in a total cost of $12.50, of which $10 (i.e. 80 percent) would be federally reimbursable.

An application under the Emergency Fund must be made by the state, territory or tribe, though the expenditures can be ones incurred by counties or municipalities if they are allowable expenditures included within the jurisdiction’s application.

Under the law, in order to be reimbursable, a jurisdiction must incur expenditures no later than September 30, 2010. The funds a jurisdiction receives as reimbursement are then available to the state without fiscal year limitation, and can be spent in any way permissible under TANF.

The TANF agency is responsible for ensuring that TANF funds are spent in accordance with applicable federal requirements, and must inform subgrantees of the reporting and other accountability requirements in order to ensure compliance with federal law.

For additional information:

A list of TANF Emergency Fund Applications that have been approved, which includes the maximum amount each jurisdiction qualifies for, the amounts awarded to date, and the categories in which jurisdictions have had increased expenditures, can be found at /ofa/resource/form-ofa-100.

The application form and instructions for jurisdictions seeking Emergency funds is at /ofa/resource/policy/pi-ofa/2010/pi201001/pi201001

A list of state approaches for non-recurrent short term benefits can be found at /ofa/resource/examples-non-recurrent-short-term-benefits

A set of questions and answers about specific issues relating to the TANF Emergency Fund is at /ofa/resource/recovery/tanf-faq. A number of questions and answers concerning subsidized employment is at /ofa/resource/recovery/tanf-faq.htm.

For further information, please contact the TANF Regional Manager for your area, see /ofa/resource/ofa-regional-tanf-managers.

Last Reviewed Date: