Temporary Assistance for Needy Families Program

TANF Program participants have access to their monthly cash assistance benefits through electronic benefit transfer (EBT) cards. Policies and procedures are in place to ensure that TANF benefits are only used by recipients to purchase goods and services essential or necessary for the welfare of their families.

The state’s EBT Restrictions Plan, approved by the Administration for Children and Families, details the specific policies and procedures related to in place to ensure that monthly cash assistance benefits are both accessible and only used for eligible products and services.

Electronic Benefits Transfer (EBT) Transactions

The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96) Section 4004 of the Act requires States (but does not require Tribes) to prevent the use of Temporary Assistance for Needy Families (TANF) assistance in electronic benefit transfer (EBT) transactions at specified locations. In particular, the law requires States receiving TANF grants “to maintain policies and practices as necessary to prevent assistance provided under the State program funded under this part from being used in any electronic benefit transfer transaction in any liquor store; any casino, gambling casino, or gaming establishment; or any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.”

The law defines an electronic benefit transfer transaction as “the use of a credit or debit card service, automated teller machine (ATM), point-of-sale (POS) terminal, or access to an online system for the withdrawal of funds or the processing of a payment for merchandise or a service.”

The State Plan also must include an explanation of how the State plans to ensure that (1) recipients of the assistance have adequate access to their cash assistance, and (2) recipients of assistance have access to using or withdrawing assistance with minimal fees or charges, including an opportunity to access assistance with no fee or charges, and are provided information on applicable fees and surcharges that apply to electronic fund transactions involving the assistance, and that such information is made publicly available.

Implementation Steps

The Division of Workforce Services implemented the following steps to restrict the use of TANF EBT cards at the specified establishments. These steps include:

Step One - Establishment Identification:

• • Documentation of those establishments identified as “liquor stores” by requesting a list of licensed establishments from the Arkansas Department of Alcoholic Beverage Control (ABC) Enforcement Division.
  • Documentation of those establishments identified as “gaming establishments” by requesting a list of licensed establishments from the Arkansas Racing Commission.
  • Documentation of those establishments identified as “adult entertainment establishments” by requesting a list of licensed “private clubs with adult entertainment” establishments from the Arkansas Department of Alcoholic Beverage Control (ABC) Enforcement Division.

It must be noted that “casinos” are legally allowed to operate in the following counties in the State of Arkansas: Crittenden, Garland, Jefferson, and Pope. Two establishments, Southland Greyhound Park and Oaklawn Racing and Gaming, are statutorily allowed to have gaming on their premises.

Additionally, casinos are located in the adjoining states of Oklahoma, Louisiana, and Mississippi. These casinos have been identified and transactions in these establishments will be monitored.

Step Two - Federal Restrictions - Merchant Notification:

• • Sent a letter to the Alcoholic Beverage Control (ABC) Enforcement Division soliciting their assistance in informing establishments of the federal restrictions regarding the use of TANF EBT cards in their locations.

Step Three - Federal Restrictions - Participant Notification:

• • Sent a letter to all current TANF participants advising them of the federal restrictions regarding the use of TANF EBT cards in these locations.
  • Incorporated information regarding the federal restrictions on the use of TANF EBT cards in the initial assessment process for all new TANF participants. Additionally, participants were required to sign an acknowledgement that they were made aware of the EBT restrictions as well as the consequences for utilizing their EBT cards at restricted establishments.

Step Four - Federal Restrictions - Staff Notification:

• • Developed and delivered training for DWS TANF staff regarding the Federal Restrictions.

Step Five - Development of Program Policies

• Developed TANF Program policies that addressed the following:

• Penalties for clients who uses or accesses TANF cash benefits in an EBT transaction in a prohibited location.
• Penalties for merchants/establishments that allow prohibited EBT transactions.
• Process by which agency staff that becomes aware of prohibited EBT transactions to report such transactions.

Step Six - Development of EBT Transactions Monitoring

• • Developed and deployed EBT Transactions monitoring activities will continue within the existing DWS TANF Unit activities.

Ensuring Reasonable Access to TANF EBT

The implications for restricting TANF benefit access at inappropriate locations is a reduction in the number of cash access locations available to EBT cash recipients. This is especially true in rural locations that have very few alternatives for cash access.

While use of or access to TANF benefits in an EBT transaction is limited as described above, the Division is also required by federal law to ensure TANF participants have adequate access to their cash benefits. “Adequate access” to TANF benefits is determined on a case-by-case basis and may vary depending on individual participant strengths and barriers, including access to transportation.

When a TANF client expresses concern with access to their cash benefits or a worker determines a TANF participant does not have adequate access to benefits, the Division will take reasonable steps to ensure adequate access for the participant. Reasonable steps do not include granting EBT withdrawals at one of the prohibited establishments.

EBT Card Access Fees and Charges

Currently, TANF participants may use an ATM two times per month for free. Some ATMs and retailer POS terminals may surcharge their accounts. A surcharge is different from a transaction fee and may or may not be charged by a bank or retailer each time the TANF participant utilizes their card to access their cash benefits. There will be a warning about this fee. TANF participants do not have to pay the fee if they choose not to get their cash at locations where the fee is charged.

Some ATMs and most retailer POS terminals do not surcharge. TANF participants are encouraged to find a location that does not surcharge.

After the second cash withdrawal, TANF participants are charged a transaction fee. If they do not have a sufficient remaining balance in their account to pay this fee, the transaction will be denied.