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increasing the Standards of Assistance. However, increases to the Standards of Assistance in the last several years and increasing expenditures in the Expanded TANF Programming category have resulted in a situation where the TANF block grant will become fully obligated in FY 25 and the current allocation of funding will result in a deficit (approximately $56.9M in FY25). Therefore, the General Assembly directed this report to make recommendations on how to structurally balance the TANF block grant.

Virginia’s TANF cash assistance program covers only those living in extreme poverty. In 1994- 1995, for every 100 Virginia families living below the federal poverty limit, 73 were receiving assistance. By 2020, only 18.1 families in Virginia were receiving TANF assistance for every 100 families in poverty. The current monthly caseload is 20,113. Recognizing the Standards of Assistance remains at a very low poverty threshold, the General Assembly added the following language to the 2020 Appropriations Act:

Item 341(K). The Department of Social Services shall develop a plan to increase the standards of assistance by 10 percent annually until they equal 50 percent of the federal poverty level.

This directive was followed by a 15% increase in 2020, a 10% increase in 2021, and a 5% increase in 2022, with the standard of assistance for TANF now equivalent to 32% FPL and the gross income eligibility screening is at approximately 46% of the FPL.

The amount of TANF payments to eligible families also remained relatively low when compared to the increased cost of living. In the thirty-year period from 1985 to 2015, Virginia raised the amount of cash assistance only once. Beginning in 2016, increases have occurred on a consistent basis:

January 2016 – 2.5% increase July 2016 – 2.5% increase July 2017 – 2.5% increase July 2019 – 5% increase July 2020 – 15% increase July 2021-10% increase July 2022 – 5% increase

Between 1985 and 2022, the cost of living increased by 238%, compared to a 78% increase in Virginia’s TANF payments. The federal poverty limit, the government’s official statistical definition of poverty, is $1,526 (monthly) for a two- person household. Virginia’s maximum TANF payment for a two-person household is $489, or 32% of the federal poverty level. In an