JOBS Act Mandates Work for All Aid Recipients, Cuts State Admin Cap to 10%, and Bans Direct Child Care Funding

The Jobs and Opportunity with Benefits and Services (JOBS) for Success Act of 2025 is a massive overhaul of the federal assistance program previously known as TANF (Temporary Assistance for Needy Families). If you know someone who receives welfare benefits, or if you pay taxes, this bill is rewriting the rules on how money is allocated, who gets it, and what they must do to keep it.

The New Bottom Line: Universal Engagement and the IO Plan

The biggest shift is the move to "Universal Engagement" (Sec. 5). This means if you are deemed eligible for work, you must participate in work activities. Period. States can no longer let people slide on participation. When someone starts receiving aid, the state must conduct an assessment of their skills and barriers—like a job review, but for benefits—and then create an Individual Opportunity Plan (IOP). This IOP is essentially a contract: you sign a personal responsibility agreement, and it spells out your required work activities and the exact number of hours you must participate each month.

This sounds great for accountability, but here’s the catch for a busy parent: if you miss work activities without "good reason," the state must proportionally reduce your family’s assistance payment (Sec. 5). If you were supposed to work 100 hours but only clocked 50, your benefit is cut by half. For families already struggling, even a small, immediate cut can be devastating, especially if the "good reason" for missing work—like a sudden illness or a broken-down car—isn't accepted by the case manager. The IOP must be reviewed every 90 days, keeping recipients on a very tight leash.

Accountability Shifts from Participation to Paychecks

For states, the measurement of success is getting a major upgrade (Sec. 6). Currently, states are mostly judged on how many people participate in work activities. This bill changes the focus entirely to outcomes. Starting in 2028, states will be judged and penalized based on four key metrics:

1. Job Retention (40% weight): Are people still in unsubsidized jobs six months after leaving the program?
2. Job Retention (25% weight): Are they still employed a full year later?
3. Median Earnings (25% weight): How much money are they actually making?
4. Education Attainment (10% weight): Are young adults (under 24) finishing their education?

This is a huge win for job quality. Instead of pushing people into any job just to meet a participation quota, states will now be incentivized to focus on helping people find jobs that last and pay well. However, meeting these high targets will be tough, and if states fail, their federal grant money gets cut.

The Budget Tightens: No More Child Care and Less Overhead

This bill contains some major financial restrictions that will impact how states run their programs and, crucially, what services they can offer.

First, the bill prohibits states from using these federal funds for direct spending on child care services or early childhood education (Sec. 7). For parents trying to meet the new, strict universal work requirements, this is a massive hurdle. Child care is often the single biggest barrier to employment, and taking away this funding source means states will have to scramble to cover the costs using other, potentially already strained, funding streams.

Second, the cap on administrative costs is slashed from 15% to 10% (Sec. 7). While this sounds like a good way to ensure more money goes to families, it could strain state agencies. They now have complex new mandates—like creating and tracking the IOPs for every single recipient—but less money to pay the staff or upgrade the technology needed to manage it all effectively. If states exceed the 10% cap, they face a penalty of up to 5% of their grant the following year.

Finally, the bill strictly enforces a rule against supplanting (Sec. 10). Federal funds must be used to add to (supplement) existing state spending, not replace it. States can no longer use federal money to backfill holes in their own budgets, ensuring federal dollars go toward new or expanded services.

New Rules on Who Gets Aid and Where They Spend It

The JOBS Act introduces two very specific restrictions on eligibility and spending:

1. Income Limit: States cannot use federal funds to assist any family whose monthly income is more than twice the official poverty line (Sec. 7). This creates a hard ceiling. While it ensures funds go to the neediest, it could instantly disqualify families whose income is just over that threshold, creating a "cliff effect" where a small raise leads to a total loss of benefits.
2. "Needs Not Weed": The bill explicitly prohibits the use of cash assistance at any business that sells marijuana (Sec. 16). This tightens the rules on where recipients can spend their benefits, adding marijuana dispensaries to the list of prohibited transactions, which usually includes places like liquor stores or casinos.

On the positive side, the bill formally adds reducing child poverty as a core purpose of the program (Sec. 11), ensuring that states must align their activities—like job training and career advancement—with this explicit goal.