Nebraska’s cash assistance program is failing to reach families in need

In 2019, an average of 4,640 Nebraska families received monthly assistance through Aid to Dependent Children, Nebraska’s direct cash assistance program funded by the Temporary Assistance for Needy Families federal block grant. In 2022, only 2,766 families received ADC.

In 2014, Nebraska had a TANF “rainy day” fund balance of more than $55 million, which was described by State Auditor Mike Foley as a “significant deficiency” in Nebraska’s handling of the funds. That balance has ballooned to $130 million as of November 2022.

Nebraska families are struggling, and our state is sitting on millions. What on earth is going on?

There is no reason to believe that only 2,766 families are living in poverty in Nebraska. In fact, the 2021 American Community Survey census numbers show a 10.2% poverty rate for families with children. That number jumps to 21.7% in a single-parent family and jumps even higher, to 44%, in a single-parent family with children under 5 years old.

The low number of families receiving ADC is due to various state and federal policies which result in very few families actually being eligible to receive assistance through the program.

An interim hearing held by the Legislature’s Health and Human Services Committee last fall (report from the Legislative Fiscal Office here) and this article in The Reader both addressed how misguided policymaking at the state level has made cash assistance unavailable to families in poverty, even when those families are working and trying to become economically independent.

First among these policies is an eligibility standard so low that a family has to not only be in poverty, but in deep poverty. In order to begin receiving cash assistance, the net earned income for a family of three must be no higher than $881 per month, which equates to only 43% of the federal poverty line for 2023.

These struggling families also qualify only for a very low monthly benefit. The maximum amount that a family of three can receive is $485 per month, and that is only if the family has no other income. As the family brings in more earnings, their benefit amount decreases.

That $485 maximum ADC benefit will only cover 52% of rent for a modest two-bedroom dwelling in Douglas County, and no more than 64% of rent in any of Nebraska’s 93 counties. Section 8 housing subsidies are largely unavailable to most families who qualify due to limited funds and long waiting lists.

For a family with no other income, the ADC cash assistance must cover not only housing costs, but clothing, school expenses, transportation, personal care, and many other monthly expenses. Food is subsidized by the Supplemental Nutrition Assistance Program (SNAP), for which all families receiving ADC are categorically eligible, though SNAP often does not offer enough to cover a family’s entire monthly grocery needs.

On top of these eligibility and benefit level challenges, before a family can receive ADC benefits, they are required to cooperate with child support enforcement and turn over their rights to child support payments to the state.

The phrase “child support” seems to refer to money that will always go towards supporting a child, but in Nebraska, that is not always the case. Most of the child support paid on behalf of families receiving cash assistance is kept by the state and shared with the federal government.

Does it really make practical or moral sense to pay such a low monthly benefit that families still have trouble meeting their basic needs?

Does it make sense to take money away from these families to “reimburse” the government, when the state is sitting on $130 million in unused TANF funds?

Three bills being considered by the Nebraska Legislature this session, Legislative Bill 233, LB 290 and LB 310, would take the first steps toward addressing these issues. LB 233 would ensure that child support funds are distributed to families receiving ADC benefits, not kept by the government. LB 290 would increase the ADC eligibility limit and benefit amount, and LB 310 would make a modest increase to ADC maximum benefits.

It is time for the Legislature to act ‑ over 50,000 Nebraska children are living in poverty; approximately 21,827 are living in extreme poverty (below 50% of the federal poverty line). Bringing Nebraska’s cash assistance program up to date would help more of them receive temporary relief.