As recession took hold, families sought cash help

Reuters News
Posted: Dec 01, 2011 6:53 PM
As recession took hold, families sought cash help

By Lisa Lambert

WASHINGTON (Reuters) - The number of families collecting cash welfare benefits rose during the longest and deepest economic downturn in the United States since the Great Depression, the U.S. Census said on Thursday.

Caseloads in the Temporary Assistance to Needy Families (TANF) program had fallen in the 1990s and leveled off in the early part of the 2000s.

Then the recession hit in 2007 and officially ended in 2009. The participation rate in the program rose to 4.8 percent of families with children under the age of 18 in 2009 from 3.8 percent in 2006. The number of benefit recipients rose to 1.7 million from 1.4 million.

Participation also rose in other federal aid programs, including those that help cover energy bills and grocery costs, the Census said.

"The report suggests that the recent economic recession impacted American families with children and that the impact was not just limited to TANF families or poor families," Shelley Irving, a demographer at the Census, said in a statement.

The program, which resulted from massive welfare reforms enacted under President Bill Clinton, sends $16.6 billion total each year to the states. They, in turn, make monthly cash payments to low-income families to help pay for food, clothing, housing and other needs. Many also provide one-time emergency payments.

Much of the increase during the recession came from families who used the benefits for a short period. The percentage of families who used TANF for part of the year jumped to 3.3 percent in 2009 from 2.1 percent in 2006.

Some of it also came from an unlikely source -- married couples.

"Married-couple families, who have the lowest overall rates of TANF participation, saw an increase in their participation rate from 2006 to 2009," Irving said.

In 2009, 1.9 percent of families headed by married couples received benefits, compared to 1.6 percent in 2006.

Cash benefits only make up about 41 percent of states' costs for the program. Nonetheless, three states have recently cut the benefit amounts, according to a report from the National Governors Association and National Association of State Budget Officers released earlier this week.

California cut benefits 8 percent, Nevada 1.8 percent, and Wisconsin 2.9 percent. Currently, Nevada has the highest unemployment rate in the country, followed by California.

Florida raised amounts by 4.1 percent this fiscal year, which started in July.

Other states left benefit amounts untouched, but changed their programs. Arizona residents now can only collect TANF for 24 months over their lifetimes, as opposed to the previous 36 months.

While unemployment became a bigger problem for families of all types during the recession and after -- the national jobless rate is 9 percent -- the Census found that parents were eager to solve the problem.

"Enrollment in programs to help find work and job skills programs increased for TANF and non-TANF families from 2006 to 2009," the report said.

(Editing by Eric Beech)