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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2017 - 2018
Regular Session
MEMORANDUM
| Posted: | April 3, 2018 10:19 AM |
|---|---|
| From: | Senator Judith L. Schwank and Sen. Charles T. McIlhinney, Jr. |
| To: | All Senate members |
| Subject: | Phased-in increase to TANF disregard |
| In the near future we will be introducing legislation to raise the share of household earnings that applicants for Temporary Assistance to Needy Families (TANF) benefits may keep without counting as income for eligibility-determination purposes. Applicants now may discount up to 50 percent of their household income for eligibility determinations. Our proposal would incrementally increase that to 75 percent over the next four years. The discounted income, also known as the “earned income disregard,” is a tool designed to reduce disincentives to workforce participation. Nationally, about 85 percent of TANF households are headed by women, who also account for about two-thirds of minimum wage earners. At the present 50-percent level, the income disregard is unable to overcome the disincentive to work caused by the costs of holding a job (e.g., taxes, transportation, clothing, and child care) and resulting reductions in TANF and SNAP (food stamp) benefits. A recent study by the Legislative Budget and Finance Committee found that increasing the earned income disregard from 50 percent to 75 percent would have the effects of permitting families to gain earned income closer to 100 percent of the federal poverty level before the family stops qualifying for a partial TANF grant, and more slowly reducing their loss of a partial TANF grant. TANF is state-administered, but federally funded for food, shelter, utility, and non-medical expenses. States have wide discretion in determining and awarding benefits. In Pennsylvania the program is time-limited. With limited exceptions, families are only able to receive TANF for up to five cumulative years in their lifetime. Today, the highest TANF award in Pennsylvania is worth less than half what it was when it was set in 1990, and it is less than a third of the federal guideline for poverty. Co-sponsors of previous legislation during the 2015-16 session included Senators Brewster, Fontana, Hughes, Yudichak, Williams, Costa and Farnese. This proposal differs from that proposal only in phasing in the discount increase over four years, rather than increasing it the full amount in a single year. We hope that you will support this effort to remove impediments to work. |