The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) changed the nature, purpose, and financing of public aid. PRWORA ended a 60-year-old federal entitlement, Aid to Families with Dependent Children (AFDC), replacing it with the transitional program, Temporary Assistance to Needy Families (TANF). The goals and implementation of TANF are now being re-explored in the process of reauthorization and the 2006 release of TANF interim final regulations.

PRWORA brought many uncertainties about its potential impact on low-income mothers who misuse alcohol, prescription medication, or illicit drugs. At welfare reform's passage, the prevalence of substance use, abuse, and dependence among recipients was largely unknown. Many advocates, administrators, and researchers feared that substance use disorders were widespread and that such disorders would prevent many recipients from complying with TANF requirements. Substance abuse and dependence proved less common among TANF recipients than was initially feared, but the identification, assessment and treatment of recipients with these disorders raises complex issues for policy-makers. These issues continue to be debated in the aftermath of the 2005 TANF reauthorization and the 2006 release of TANF interim final regulations.