Adjust TANF Income Disregards – FACT SHEET

Social Action Linking Together (SAL)T and Virginia Poverty Law Center (VPLC) support adjusting the Earned Income Disregards for Temporary Assistance for Needy Families (TANF) via a Budget Amendment Item #.

This proposed budget amendment addresses the critically positive issues of:
⇒ “Rewarding work” by allowing TANF families to retain a larger share of their earnings as a positive step toward recognizing their work efforts and helping them to live better; and
⇒ Adjusting the current “disregard formula” which allows TANF families to keep some of their earned income.

Currently, the Virginia Earned Income Disregards of $167+20% are:
⇒ Inadequate to offer meaningful support and incentives to leave TANF.
⇒ Therefore, in order to meet the goals of the TANF purpose: We’re recommending a change in the Virginia Earned Income Disregards to $200 + 25%.

This budget amendment seeks to assure that TANF Program funds administered by DSS are best used for the intended purposes of the TANF Program to:
⇒ Strengthen families by helping stabilize families economically;
⇒ Offer Virginia families in poverty the opportunity to achieve economic independence by removing barriers and disincentives to work; and
⇒ Provide positive incentives and work skills, opportunities, and security necessary to transition to self-sufficiency and independence from Welfare.

Solution: 1) To update earned income disregards to provide meaningful- work incentives; and
2) To change the eligibility calculation by disregarding additional earned income.
This adjustment would result in less net income being counted. This federally funded benefit will not only help thousands of Virginians make ends meet but also boost Virginia’s economy. Spending on children (especially low-income children) has among the highest returns on investment of any form of government spending.

Legislators should take advantage of this opportunity to help Virginia’s children and families. Investing in families and children today will help ensure strong and productive society tomorrow.

Additional notes:

⇒ This amendment would make 2,925 new families eligible. It should be off-set by more families getting off TANF more quickly, being more successful in achieving a lasting self-sufficiency, and not having to return to TANF.

⇒ Also, $4.4 million from non-general/federal funds would be made available via this budget amendment and $400,000 General Funds/GF for -FY 2023 and FY 2024 budget years.

(November 22, 2021)