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Five Things You Might Not Know About Welfare

Welfare reform changed the lives of the poorest Americans in surprising ways.

When signed into law by President Bill Clinton in 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (also referred to as the Welfare Reform Act) was supposed to “end welfare as we know it.” While welfare reform and its consequences have been hotly debated since then, one thing all sides can agree on is that welfare itself is far different from what it was when this bill was signed into law. Let’s examine some of the surprising aspects of welfare reform that many might not be aware of.

Most Welfare Funds Are Not Used for Cash Assistance.


The Welfare Reform Act created block grants that are funded by the federal government but implemented by the states. The cash assistance is called Temporary Assistance for Needy Families, or TANF. Surprisingly, only a quarter of federal TANF funding is spent on direct cash assistance to those living in poverty.1 In addition, less than 10% is used to support job training or work-related activities.2 These were two of the primary goals of welfare reform at the time it became law. States have great flexibility in how they spend the block grants that are funded by the federal government. The only requirement is that the funding must fit into one of TANF’s four purposes: assisting needy families, promoting work and marriage, reducing out-of-wedlock pregnancy, and increasing two-parent families.3 This flexibility has led to initiatives that do not provide direct cash support to needy families. Examples include funding a program that gives private college scholarships to families with up to $250,000 in income, funding crisis pregnancy centers, and funding a counseling program to promote marriage.2

Caseworkers Cost Less Than Benefits.

One of the surprising aspects of welfare reform is how cost-efficient money spent on caseworkers has proven to be. In typical welfare, most money is spent directly on benefits to clients and not on administrative costs and case management services. An improved model of welfare reform might include combining the necessary cash support with the services of a clinical social worker for all clients.

Block Grants Have Fallen in Value

The block grants that were a central aspect of the Welfare Reform Act have proven to be a significant issue as welfare reform has aged. When TANF was constructed, there was a debate about whether the block grants would adjust for inflation over time. In the end, the Welfare Reform Act became law without that provision. Not adjusting the block grants for inflation has cause them to erode in value by one-third since 1996. This effectively reduces the amount of benefits states can give out, and the number of families that receive benefits.3

The Act Failed to Deliver on Its Central Promise.

Proponents of welfare reform argued that it would help reduce poverty by moving adults in low-income households into stable employment. It may come as a surprise that, over time, the reform was unsuccessful at connecting those with low income to gainful employment. As many experts have pointed out, there are not enough jobs—specifically decent-paying jobs—to go around at the bottom of the labor market. In fact, many experts suggest that the Welfare Reform Act made poverty worse for millions because they were left without a path to employment or any type of safety net to fall back on.1 In the end, many of the poorest in the United States were living on less income than before welfare reform.

Debate on the Act’s Effectiveness Remains.

In the nearly 22 years since the Welfare Reform Act was passed, the debate on whether it had the desired impact continues. Advocates in favor of welfare reform hoped that pushing families off of cash assistance would lead to more people finding work. Some research indicates that occurred. Between 1995 and 2000, the share of never-married mothers working rose from 49% to 66%.1 This extra income, presumably inspired by the welfare reform work requirement, helped lift many out of poverty.

On the other hand, critics argue that the poorest Americans were harmed by the Welfare Reform Act. According to Census Bureau statistics, the number of children living in deep poverty (defined as living in families with incomes less than 50% of the poverty line) has risen during the past 20 years. Some experts blame welfare reform for the increase in extreme poverty—families living on $2 per day or less.1

As we have seen, the Welfare Reform Act did not eliminate poverty in the United States. There is still a need for professionals who serve the poorest among us, and a Master of Social Work can prepare you for a career in helping those in need. Whether you think your skills might be best suited for a career as a school social worker, a medical social worker, or another social work career, a MSW online from an accredited university can be the perfect fit. Online MSW programs, in particular, enable you to earn your degree while still maintaining your usual commitments.

If you’re not yet ready to earn your master’s degree, you may wish to consider a Bachelor of Social Work (BSW). Professionals who have earned a bachelor’s in social work are prepared to enter a number of great roles and have been know to hold positions such as a child life specialist, hospital social worker, mental health case manager, substance abuse counselor, and more.

Walden University offers an online BSW program and MSW program, both of which are accredited by the Council on Social Work Education (CSWE). These degree programs allow you to expand your career options as you earn your degree in a convenient, flexible format that fits your busy life.

Welfare reform is still a work in progress, and it may not have achieved the intended consequences. Regardless of how, or if, welfare reform is changed in the future, those in social work careers will maintain a critical role in caring for those most in need in the United States.

Walden University is an accredited institution offering an online Bachelor of Social Work and Master of Social Work degree programs. With Walden University you can earn a degree to help those most in need.


Walden University is accredited by The Higher Learning Commission,

Walden University’s BS in Social Work (BSW) and Master of Social Work (MSW) programs are accredited by the Council on Social Work Education (CSWE), a specialized accrediting body recognized by the Council for Higher Education Accreditation (CHEA). CSWE's Commission on Accreditation is responsible for developing accreditation standards that define competent preparation for professional social workers and ensuring that social work programs meet these standards.