TANF Work Rates Get Recalibrated: No More Credit for Pennies!
Published Date: 4/6/2026
Proposed Rule
Summary
The government is updating how it measures work participation for families getting help through TANF. They’re changing the base year for counting caseload drops from 2005 to 2015 and won’t count tiny monthly payments under $35 in work rate calculations. These changes, required by a 2023 law, affect states and could impact funding starting soon, so everyone should pay attention and share their thoughts by May 6, 2026.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 2 costs, 1 mixed.
Caseload Credit Base Year Reset
The rule resets the caseload reduction credit base year used in TANF work participation rate calculations from FY 2005 to FY 2015, effective October 1, 2025. That change can reduce the credit a State receives when measuring its work participation rates (statutory rates are 50% overall and 90% for two-parent families), which may raise a State's work participation rate targets.
Exclude SSP Payments Under $35
Starting October 1, 2025, families that receive less than $35 in monthly assistance funded exclusively with Separate State Program (SSP) funds will be excluded from the TANF work participation rate calculations. States that have used nominal "small checks" (e.g., around $10/month) to count working individuals for their work rates will no longer be able to count those families unless the payment is raised to $35 or the state changes the program.
Estimated Small Grant Reductions
The Congressional Budget Office estimates that the combined effect of these statutory changes would reduce federal direct spending (TANF block grants) by about $5 million over the 2023–2033 period because some states might not meet work requirements and could face reduced grants. HHS reports it does not expect a direct impact on federal spending beyond that CBO estimate.
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