Preventing Waste, Fraud, and Abuse in TANF Act

Overview

HR 8872, the Preventing Waste, Fraud, and Abuse in TANF Act, would amend part A of title IV of the Social Security Act to better target Temporary Assistance for Needy Families (TANF) funds, strengthen program integrity, require measurement of improper payments, and set goals for reducing fraud and improper payments. The bill is introduced in the 119th Congress and sets an effective date of October 1, 2027.

Main purpose and intent

• Increase the focus of TANF funds on low-income families in need.
• Strengthen state-level accountability and program integrity to prevent waste, fraud, and abuse.
• Establish procedural timelines and limits on how states obligate and expend TANF funds.
• Prohibit the use of federal TANF funds to replace state and local funding (supplantation) and require certifications to avoid supplanting.
• Require a plan and measurable framework to reduce improper payments within a decade.

Key provisions and changes

1. Payment integrity applicability (Sec. 2)

   • Applies the Payment Integrity Information Act of 2019 to TANF at the state level in the same way it applies to federal agencies.
   • Requires the Secretary of Health and Human Services to report within one year with a plan to reduce or eliminate improper TANF payments within 10 years.

2. Targeting funds to families in need (Sec. 3)

   • Adds a threshold: TANF grants under section 403(a)(1) must be used only to provide assistance or services to families whose income is below twice the federal poverty level, based on updated poverty guidelines.

3. Obligation and expenditure deadlines (Sec. 4)

   • General rule: States must obligate TANF funds by the end of the next fiscal year and expend them by the end of the second following fiscal year.
   • Limited reserve option: States may reserve up to 15% of funds for future use, with safeguards.
   • Reserve cap: Total reserves cannot exceed 50% of the prior year’s TANF payments to the State.
   • States must notify the Secretary of intent to reserve funds.

4. Prohibition on replacing state funds (Sec. 5)

   • Clarifies that federal TANF funds should supplement, not replace, state and local funding for programs under this part.
   • Requires a certification from the state chief executive that TANF funds will not be used to supplant non-federal funds.

5. Effective date (Sec. 6)

   • The amendments take effect October 1, 2027.

Who is affected

• States administering TANF (and their agencies) would implement stricter targeting, reporting, and timing requirements.
• State lawmakers and executives would provide certifications regarding non-supplanting.
• The federal Department of Health and Human Services (HHS) would develop and report on an improper payments reduction plan.
• TANF recipients, specifically low-income families, would be the direct beneficiaries of targeted aid and strengthened safeguards.

Procedural and timeline notes

• Enactment triggers the start of implementation, with an enforcement and reporting framework to be developed by HHS within one year of enactment.
• A 10-year horizon is established to measure and achieve reductions in improper payments.
• Implementation of new targeting, reserve, and reporting rules would begin following the October 1, 2027, effective date.