TANF-ACF-PI-2021-02 (The Pandemic Emergency Assistance Fund)

TO:

State, tribal, and territorial agencies administering the Temporary Assistance for Needy Families (TANF) Program, and other eligible territories.

SUBJECT:

The Pandemic Emergency Assistance Fund.

REFERENCES:

The American Rescue Plan Act, Public Law 117-2; section 403(c) of the Social Security Act.

PURPOSE:

To provide initial guidance regarding the newly established Pandemic Emergency Assistance Fund.

BACKGROUND:

On March 11, 2021, the President signed the American Rescue Plan Act of 2021 into law.  Now Public Law 117-2, it establishes the Pandemic Emergency Assistance Fund (PEAF) in section 403(c) of the Social Security Act (the Act). 

The PEAF provides funding to states (which includes the District of Columbia), tribes administering a TANF program, and five U.S. territories^[1] to assist needy families impacted by the Coronavirus Disease 2019 (COVID-19) pandemic.  Grantees may use funds to provide certain non-recurrent, short term (NRST) benefits, described in more detail below.  Additionally, they may use funds for administrative costs (up to a 15-percent cap for states and territories and up to the negotiated cap for tribes).  All grantees must use funds to supplement, and not supplant, other federal, state, tribal, territorial, or local funds.

We will issue supplemental information specific to tribes that integrate TANF under Public Law 102-477 into a single plan.

GUIDANCE:

For more than a year, the COVID-19 pandemic has caused a national emergency affecting not only public health, but also the American economy.  Many states, tribes, and territories have had to implement emergency measures to assist low income families in this difficult time.  The PEAF represents a singular opportunity to help some of our nation’s neediest families struggling with the effects of the pandemic.  The PEAF can be a powerful tool to give poor families a much-needed boost in the face of lost wages, limited work opportunities, or housing insecurity, to name just a few obstacles exacerbated by the pandemic.  This is especially true if grantees also make use of the unobligated TANF balances that many have accumulated for just such a crisis.  We encourage grantees to use this opportunity to assist needy families affected by the pandemic in meeting their basic needs.

Funding

The law specifies an allotment formula.  After deducting $2 million for federal administration:

• 92.5 percent of funds (equal to $923,150,000) will be distributed to states (including the District of Columbia), using a two-part formula, half based on child population and half based on fiscal year 2019 state expenditures on non-recurrent short term benefits, basic assistance and emergency assistance authorized solely under prior law. 
• 7.5 percent of funds are set aside for Tribal TANF programs and all 5 U.S. territories, to be distributed in a manner deemed appropriate by the HHS Secretary.

Requesting Funds

A grantee must make a one-time election of the amount of its allotment it wishes to receive.  Under the law, states must inform HHS of its expenditure commitment within 45 days of the enactment of the American Rescue Plan Act of 2021, and tribes and territories within 90 days of enactment.  Those dates are April 25, 2021, for states and June 9, 2021 for tribes and territories.  We have created a form that allows each grantee to make this election.  If a grantee does not submit a request for an allotment or submits one after the due date, the grantee will lose any claim to the allotment. 

We have published tables showing the full allotment of each grantee and will include them as an appendix to this program instruction as well.  While each grantee must decide whether or not it intends to use its full allotment, it is important to understand that if a grantee elects to receive an amount less than the full allotment, it will lose its claim to the remainder of that allotment.  Any such unallotted funds will be reallotted, as discussed below.  For example, suppose a grantee’s full allotment were $2,876,380.  If the grantee elected to accept $2,000,000 of that allotment, the remaining $876,380 would no longer be set aside for that grantee and would be reallotted to all grantees eligible for reallotment.

Reallotment

The law requires HHS to reallot unused funds among eligible grantees, discussed below.  This means that we will reallot:  (1) funds not initially awarded to a grantee because it chose to receive less than its full allotment; and (2) funds from the initial award that are unexpended (including unliquidated obligations) at the end of the statutory expenditure period, i.e., September 30, 2022.  We anticipate having only one reallotment of those two sources of funds, but we will make a decision on whether to have more than one after we see how much of the allotment grantees request initially.  We will distribute reallotted funds based on the original allotment formula.  Under the law, a grantee must expend reallotted funds within 12 months of receipt of the reallotted funds.

All grantees are eligible for reallotted funds, unless they have unexpended funds at the end of the expenditure period.  If after September 30, 2022, a grantee has unspent funds from its initial award — i.e., any unobligated funds or any unliquidated obligations — the grantee will not be eligible to receive reallotted funds. 

Expenditure Period

A grantee has from April 1, 2021, to September 30, 2022, the end of fiscal year 2022, to expend its initial award.  As noted above, if a grantee has not expended all of its funds by that date, HHS will reallot any unused funds to other eligible states, territories, and tribes, which must expend the reallotted funds within 12 months of receipt, as specified in the legislation.

Regardless of when it receives its PEAF funds, a grantee may use the funds for allowable expenditures on or after April 1, 2021.  For example, if a grantee received its funds on May 15, 2021, it could use the PEAF funds to reimburse itself for allowable expenditures it made starting on April 1, 2021.

Use of Funds — Administrative Costs

Grantees may use funds for administrative costs, within limitations.  For states (including the District of Columbia) and territories, the law provides a 15-percent cap on administrative expenditures.  For tribes, the same cap will apply to administrative costs in the PEAF that a tribe negotiated for administrative costs in its approved tribal TANF plan (or approved 477 plan for federally recognized tribes and tribal consortia that integrate TANF under P.L. 102-477).

Use of Funds — Non-Recurrent, Short Term Benefits

For the purposes of the Pandemic Emergency Assistance Fund, NRST benefits mean cash payments or other benefits that meet the regulatory definition (45 CFR 260.31(b)(1)), but are limited to those that fall into the specific expenditure reporting category mentioned in the legislation (line 15 of the ACF-196R (PDF), the state financial reporting form for the TANF program).  In other words, for this fund, NRST benefits, like all NRSTs under TANF, must:

• be designed to deal with a specific crisis situation or episode of need;
• not be intended to meet on-going needs; and
• not extend beyond four months;

and (as explained in the instructions for reporting on line 15 of the ACF-196R) NRSTs paid for with PEAF funds:

• must only include expenditures such as emergency assistance and diversion payments, emergency housing and short-term homelessness assistance, emergency food aid, short-term utilities payments, burial assistance, clothing allowances, and back-to-school payments; and 
• may not include tax credits, child care, transportation, or short-term education and training.

Like TANF, any PEAF-funded benefit must meet a purpose of Title IV-A of the Social Security Act.  Given that the fund was created specifically to help address needs arising out of the pandemic, we have determined that NRST benefits that meet Purpose One (provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives) are in line with the PEAF and we do not think benefits meeting the other purposes are.  If a grantee wishes to use PEAF funds for a benefit that meets a different purpose, it must be able to demonstrate how the benefit is designed to address pandemic-related needs.

In most cases under TANF, a NRST benefit addresses a “specific episode of need,” which means that the state or tribe has determined the specific need of that family; however, the regulation allows for NRSTs to address a “specific crisis situation.”  As is evidenced by Congress creating the PEAF, the extraordinary nature of the COVID-19 pandemic and its sweeping economic impacts constitute a “specific crisis situation” allowing a grantee to offer a NRST benefit broadly to needy families who are financially and otherwise eligible.  We hope that making this determination now will enable grantees to act expeditiously in distributing PEAF benefits and be responsive to the current crisis.  If a grantee does choose to offer a benefit without determining an individual episode of need, it would need to be clear that the NRST expenditure was related to the pandemic.  Indeed, as we noted above, all PEAF-funded benefits must be designed to address needs arising from the pandemic.  For example, a grantee might consider crafting a NRST to provide extra cash for all current TANF recipient families who are affected by the pandemic.  This benefit clearly meets Purpose One and is pandemic-related.

Here are some other examples of NRST benefits that grantees might want to provide with PEAF funds.  The NRST benefits a grantee funds with PEAF need not be the same as the ones funded by TANF.

• A one-time payment to provide extra cash to all current TANF recipient families to assist them in dealing with added costs caused by the pandemic.
• A one-time payment to provide extra cash to weather the pandemic to current Supplemental Nutrition Assistance Program (SNAP) recipient families with children affected by the pandemic.
• A benefit to provide extra cash to replace lost wages to all families with children eligible to receive SNAP or other means-tested benefits who are affected by the pandemic.
• Assistance for families who are behind in rent or experiencing other housing insecurity due to the pandemic.
• Cash assistance for short-term basic needs to help families with mixed immigration status (e.g., citizen children with parents who are not eligible due to their immigration status) who are affected by the pandemic.
• A benefit to cover burial expenses for needy families who have had a family member die from COVID-19.
• A payment for hotel rooms and meal delivery for people who need to quarantine away from their families.
• A benefit to secure personal protective equipment. 
• A voucher to cover the cost of utility bills in arrears due to financial issues arising from the pandemic.

Eligible Recipients of NRSTs

The recipients of PEAF-funded NRSTs must be needy families with children but they do not necessarily have to be eligible for TANF cash assistance.  A grantee has the flexibility to determine what needy means for each NRST and may wish to set a higher standard than it does for TANF cash assistance, such as aligning with SNAP or Medicaid income eligibility criteria.

We remind grantees that the Income Eligibility Verification System (IEVS) does apply to the PEAF, as it is funded under Title IV-A; however tribes are not subject to the IEVS requirements.

Non-supplantation

Grantees must use funds to supplement, and not supplant, other federal, state, tribal, territorial, or local funds.  For example, suppose a grantee wants to offer diversion payments to families affected by the pandemic, but it already offers diversion assistance under TANF.  It could use the PEAF funds for diversion, as long as it adds to its program and does not replace existing funding with the PEAF dollars. 

Expenditure Data

We are revising financial reporting forms, the ACF-196R, ACF-196T, and ACF-196TR, to include a column for reporting PEAF expenditures so that grantees will not have to submit a separate form to report for this fund.  In addition, we will use the information grantees report on these forms to determine the amount of funds remaining for reallotment. 

TANF Plan Amendments

A grantee will not need to amend its TANF plan to provide NRSTs with the PEAF.  This means that a grantee could offer the same or different NRSTs from the ones it offers under TANF, as long as they meet the requirements of the PEAF, including adhering to the requirement not to supplant current federal, state, tribal, territorial, or local expenditures.

Spending Cap for Territories

The law exempts PEAF funds from the spending cap in section 1108 of the Social Security Act.