Federal Oversight for State Welfare: New Bill Mandates TANF Programs Must Meet Strict Anti-Fraud Rules by 2026

The "Eliminating Fraud and Improper Payments in TANF Act" is straightforward: it takes the federal government’s playbook for catching and stopping improper payments and hands it to the states running the Temporary Assistance for Needy Families (TANF) program. Specifically, Section 2 requires states to comply with the federal Payment Integrity Information Act of 2019 (PIIA)—a law usually reserved for federal agencies—when managing their TANF funds. This major administrative shift is set to kick in on October 1, 2026. The bill also tasks the Secretary of Health and Human Services (HHS) with delivering a detailed, ten-year plan to Congress within one year, outlining exactly how they plan to eliminate these improper payments across all state TANF programs.

The Federal Rulebook Goes State-Side

Think of the PIIA as the Treasury Department’s mandatory audit checklist for making sure federal dollars are spent correctly. By applying this to state TANF programs, the bill is essentially saying, "If you're using federal money to help families in need, you have to follow our strict federal rules for tracking and verifying every payment." For taxpayers, this is good news. The goal is to standardize oversight and cut down on waste—whether that waste is due to fraud or simple administrative error. If it works, it means fewer tax dollars are being misspent, which is a win for fiscal accountability.

The Cost of Compliance

The flip side of this increased accountability is the administrative lift for the states. TANF is a complex program, and every state runs it slightly differently. Starting in 2026, state agencies will have to overhaul their systems, hire new staff, or retrain existing ones to meet these new federal reporting and auditing standards. This process requires significant resources and IT upgrades. While the intent is to save money in the long run by eliminating improper payments, the upfront cost and burden on state budgets could be substantial. For the social worker on the ground, this could mean more paperwork and potentially slower processing times as new, stricter verification systems are put in place.

The Ten-Year Plan and the Waiting Game

It’s interesting that the compliance requirement for states doesn't start until October 2026, but the Secretary of HHS must deliver a ten-year reduction plan to Congress within the next year. This means the federal government will set the reduction targets long before the states are technically required to implement the PIIA rules. This creates a situation where the federal government sets the goalposts, but the states don't have to start running the race for another two years. While the delay provides states time to prepare for the massive administrative changes, it also means that any improper payments identified between now and 2026 will continue under the old, less stringent rules.