Diversion Cash Assistance

The COVID-19 pandemic has had a devastating impact on families across the country. Workers with low incomes have lost their jobs at three times the rate of workers with higher wages, ¹ and many have lost employer-sponsored health insurance.

As a result, many families are facing food insecurity, housing instability, and other financial challenges.

Working families with children are also facing unique challenges. Child care arrangements have been disrupted, and many schools have switched to remote or hybrid learning models.

This has made it difficult for single parents to balance both work and child care responsibilities.

In response to these challenges, some state governments have implemented Diversion Cash Assistance (DCA) funded by the Temporary Assistance for Needy Families (TANF) program as a positive alternative to going on welfare.

As the name implies, diversion cash assistance diverts eligible applicants or recipients from receiving ongoing TANF benefits by providing a lump-sum cash payment.

Diversion payments generally are equal to several months' benefits, ranging from three months in Idaho (about $900) to a year’s worth in Tennessee (roughly $4,600). They usually are offered as a one-time payment in lieu of extended cash benefits.

Here are some examples of how diversion payments can help families meet temporary emergencies:

1. A single mother who is laid off from her job can use "diversion" payment to cover her rent and utilities while she looks for a new job.
2. A family that is facing eviction may use "diversion" assistance to pay their rent and avoid being homeless.
3. A single parent who is struggling to pay for child care can use "diversion" payment to pay for child care so that the parent can go to work.

How state diversion programs work? #

In states with diversion programs, different methods are being used to determine the maximum diversion payment, resulting in different benefit amounts by state.

The following are some of the methods used:

1. Multiple of the maximum monthly benefit. This method calculates the maximum diversion payment as a multiple of the maximum monthly benefit the family would have received in monthly TANF benefits.

   For example, in Georgia, the maximum monthly benefit for a family of three is $280. If the state uses a multiple of 4, the maximum diversion payment would be $1,120.

2. Fixed benefit amount. This method provides a fixed benefit amount to all families who qualify for diversion payments.

   For example, in Colorado, the maximum diversion payment is $2,500, regardless of family size.

3. Case-by-case basis. This method determines the maximum diversion payment on a case-by-case basis, taking into account factors such as the family's income, expenses, and assets.

Diversion cash assistance state by state #

Below is a table of the maximum diversion assistance for families of three in some selected states. ² The actual amount of benefits may be less depending on the state's specific rules and requirements.

References