States Where Welfare Supports the Fewest Poor Families

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5. Minnesota
> TANF-to-poverty ratio: 41 for every 100 poor families
> Median household income: $63,488 (12th highest)
> Maximum income for initial eligibility: $1,191 (9th highest)
> Maximum monthly benefit: $532 (14th highest)

Like most states where welfare supports the most poor families, Minnesota residents are relatively affluent, and the state uses its own resources to fund most of its welfare program. The typical Minnesota household earns $63,488 annually, the 12th highest median income of all states. The percentage of Minnesotans living in poverty of 10.2% and the percentage of households earning less than $10,000 annually of 4.8% are each among the lowest of all states. Of the approximately $546 million spent on Minnesota’s TANF program, 56% is state funded, the ninth largest share in the country.

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4. Oregon
> TANF-to-poverty ratio: 46 for every 100 poor families
> Median household income: $54,148 (25th lowest)
> Maximum income for initial eligibility: $616 (17th lowest)
> Maximum monthly benefit: $506 (16th highest)

The median household income in Oregon of $54,148 a year is not much lower than the national median income of $55,775 a year. Similarly, the state’s poverty rate of 15.4% is not much higher than the national poverty rate of 14.7%. Yet, 18.6% of households in the state receive food stamps, the highest percentage of all states. In contrast, 12.8% of household nationwide rely on food stamps.

As Urban Institute senior fellow Heather Hahn noted in an interview, high reliance on a government subsidy such as SNAP even in a state where welfare is widely distributed partially reflects how low TANF benefits really are. Cash assistance is indispensable for families in financial emergencies, but in Oregon — where the maximum benefit of $506 per month is relatively high — TANF is nowhere near enough to lift a family out of poverty.

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3. Hawaii
> TANF-to-poverty ratio: 51 for every 100 poor families
> Median household income: $73,486 (2nd highest)
> Maximum income for initial eligibility: $1,740 (the highest)
> Maximum monthly benefit: $610 (9th highest)

Just over half of poor families in Hawaii receive emergency cash assistance through the state’s TANF program today. While this is well below the 68 needy families receiving assistance out of every 100 nationwide back in 1996 — the year TANF was introduced — it is the third highest TANF-to-poverty ratio in the country today.

Likely due in part to Hawaii’s nation-leading cost of living, the maximum income a family can qualify for cash assistance is also the highest in the country, at $1,740. As is generally the case, relatively generous benefits accompany the high eligibility threshold. Families in need of assistance in Hawaii can receive as much as $610 per month, the ninth highest amount. Hawaii heavily supplements the federal block grant with its own resources, funding 72% of all TANF spending, second highest after only New Hampshire.

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2. California
> TANF-to-poverty ratio: 65 for every 100 poor families
> Median household income: $64,500 (9th highest)
> Maximum income for initial eligibility: $1,315 (5th highest)
> Maximum monthly benefit: $670 (4th highest)

A family of three having trouble making ends meet in California can have income of up to $1,315 per month and qualify for cash assistance of up to $670 per month. Both the income threshold and benefit amount make California’s welfare system one of the nation’s most generous. The state is one of only three where a majority of poor families receive cash assistance.

According to other economic metrics, however, despite the relatively generous government subsidies many California families remain in need. The state’s official poverty rate of 15.3% is in line with the national rate of 14.7%. After accounting for the value of noncash benefits such as nutritional assistance, subsidized housing, contributions toward the cost of medical care, as well as expenses including income taxes, Social Security payroll taxes, childcare and other work-related expenses, the poverty rate is estimated at over 20%. California’s adjusted poverty rate, called the supplemental poverty rate, is the highest in the nation.

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1. Vermont
> TANF-to-poverty ratio: 78 for every 100 poor families
> Median household income: $56,990 (20th highest)
> Maximum income for initial eligibility: $1,053 (11th highest)
> Maximum monthly benefit: $640 (5th highest)

For every 100 Vermont families who need help making ends meet, 78 receive support under the TANF welfare program — the highest TANF-to-poverty ratio of all states and significantly higher than the nationwide ratio of 23 poor families in every 100 who receive assistance. The ratio of poor families benefiting from the grant declined substantially over the last 20 years in every state except for Oregon. Vermont’s welfare program, however, has not declined substantially from the 1996 proportion of 83 TANF recipients for every 100 needy families. With a maximum monthly benefit of $640 available to families reporting monthly income of as high as $1,053, the state’s welfare system is also one of the nation’s most generous and least restrictive.

Approximately one-third of Vermont’s welfare spending goes to child care, the eighth highest proportion of all states and the largest expenditure category in the state.