Using the TANF Emergency Contingency Fund in ARRA to Help Low-income Families with Children

Illinois Department of Human Services

The Federal TANF block grant

  • The federal Temporary Assistance for Needy Families (TANF) block grant is a flexible funding stream for states to provide a wide range of services aimed at increasing family self-sufficiency through job preparation, work, and marriage.
  • Illinois receives $585 million in TANF funds each year from the federal government, and must use these funds to provide services aimed at increasing family self-sufficiency through job preparation, work, and marriage.
  • The state is required to contribute an additional $430 million as its "Maintenance of Effort" (MOE)

ARRA TANF Emergency Fund

  • The American Recovery and Reinvestment Act of 2009 created a new and temporary TANF Emergency Fund available to states for federal fiscal years 2009 and 2010
  • Illinois can access 80% reimbursement for increased spending for TANF services/activities, up to $292.5 million
  • DHS can identify third-party funding that can count as MOE and can serve as the 20% portion of the increase that is not reimbursed by TANF ARRA funds
  • Third-party funding can include foundation funding, private fundraising, etc.

ARRA TANF Emergency Fund: The Opportunity

Private funding can have an incremental impact on services to low-income families:

 $100,000 contribution + $400,000 federal reimbursment = $500,000 total additional funding

ARRA TANF Emergency Fund (2)

The TANF Emergency Fund will finance 80% of the increased spending in three categories:

  1. Basic Assistance/monthly cash grants
  2. Short-term, non-recurrent spending
  3. Subsidized Employment

1. Basic Assistance

This is primarily cash assistance provided to very low-income families by the Illinois Department of Human Services

2. Short-term non-recurrent benefit

  • To qualify under this category, the service provided must meet the following requirements:
    • Be designed to deal with a specific crisis situation or episode of need
    • Not be intended to meet recurrent or ongoing needs
    • Not to extend beyond 4 months for an individual or family

      NOTE: these benefits can be paid to others on behalf of the family, such as a payment to a landlord

  • Funds can be used for benefits DHS delivers directly, or to support benefits or services provided by other government agencies or community-based organizations such as homeless shelters or food banks
  • Since third-party expenditures can count as MOE spending, DHS can partner with non-profits or private philanthropy to provide the 20% "match" then pass the leveraged ARRA funds to the partnering agency

3. Subsidized employment

  • Subsidized employment is designed to help participants enter the labor market through the acquisition of work experience and enhanced connection to employers
  • Included are activities like transitional jobs programs that involve payments to employers or third parties to supplement the cost of employee wages
  • Transitional jobs (TJ) assists low-income parents facing barriers to employment
  • TJ provides a bridge to unsubsidized employment by combining time-limited, wage-paying employment with a comprehensive set of services-including education and training- designed to develop skills and prepare them for success in the workplace
  • Illinois can receive reimbursement for 80% of subsidized employment costs over the base period for the full ranged of expenses related to a subsidized employment program
  • Reimbursement is not limited to the actual wage subsidy, but can include the costs of workplace benefits, supervision and training, and administrative costs

Who can be served with these funds?

  • For all three categories, eligible parties include families with minor children with annual income below 200% of the Federal Poverty Level (FPL)

    The family does not need to be receiving TANF cash assistance to be eligible

  • Under limited circumstances, non-custodial parents may be eligible for subsidized employment services

Role of the third-party partners

  • Ensure spending is on eligible families (families with children that are below 200% FPL)
  • Identify 20% funding to leverage 80% reimbursement in ARRA funds
  • Formally agree to allow Illinois to count spending toward MOE (contract or MOU)
  • Document all spending in all required quarters
  • To be eligible for matching funds from the ECF, Illinois must demonstrate an increase in spending as compared to the corresponding quarter in the identified base year
  • Even if a third party provided services with no connection to the state, they must document any spending for the required quarters/fiscal years, and demonstrate an increase in order to be eligible for the 80% reimbursement

Current Proposals

Proposed Projects

  • Transitional Jobs
    • Increase funding for projects operating at Heartland Alliance, New Moms,
  • Hunger Relief
    • Help Feeding Illinois provide food for children who cannot access food during the summer months
  • Basic Needs
    • Provide one-time emergency assistance to families in need

Soros Foundation

The Soros Foundation provided $35 million to leverage $140 million in federal funds to provide $175 million dollars to provide back-to-school grants to low-income families.

What Can I Do?

If you are interested in identifying and/or providing funding, or suggesting programs for any TANF ARRA related activities, please contact:

Caronina Grimble, IDHS