The US Justice Department on 1 September 2025 issued a sweeping new legal opinion requiring every agency within states that receive federal welfare funding to report individuals known to be unlawfully present in the country to immigration authorities. The ruling reverses a narrower Clinton-era interpretation from 1998 and extends the reporting obligation far beyond the agencies directly administering benefit programmes.

What the New Interpretation Covers

The Office of Legal Counsel (OLC) determined that the reporting requirement applies to all states participating in Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI). Crucially, the obligation now binds the entire state government — not merely the specific departments managing those two programmes.

All 50 states, the District of Columbia, and several US territories participate in TANF and SSI. Federal TANF grants alone exceed $16.4 billion annually, according to the department, giving the federal government significant financial leverage over state compliance.

What the Government Said

Assistant Attorney General T. Elliot Gaiser of the Office of Legal Counsel stated that Congress had written the requirement plainly. "When a state chooses to participate in TANF, it accepts the obligation to report illegal aliens in the United States," Gaiser said. He added: "Tax dollars intended to help vulnerable Americans should not perversely encourage illegal entry into the United States, but rather should reinforce our laws and our borders."

Deputy Assistant Attorney General Joshua Craddock, who authored the opinion, maintained that the ruling does not impose fresh obligations. "It simply restores the original meaning of the statute Congress enacted and ensures that DHS receives the information it is legally entitled to," Craddock said.

Legal Basis and the Reversal of the 1998 Opinion

The new opinion, dated 1 September, draws on a broad congressional definition of a "State" in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The Justice Department formally withdrew the 1998 OLC opinion issued under the Clinton administration, which had limited the reporting duty to the specific state agencies administering TANF or SSI.

Notably, the opinion will apply prospectively — states will not face penalties for actions taken while relying on the now-withdrawn 1998 interpretation. Federal agencies may revise TANF and SSI grant agreements and compliance procedures to reflect the broader standard.

Consequences for Non-Compliant States

The Justice Department warned that states failing to comply could face serious consequences, including the possible loss of programme funding. Given that TANF alone channels more than $16.4 billion annually to states, the financial stakes are substantial.

This comes amid a broader federal push to tighten immigration enforcement through administrative and legal mechanisms, rather than solely through legislative action. Critics are expected to challenge the reinterpretation in court, arguing that it overreaches the original statutory intent and pressures states into acting as immigration enforcement arms of the federal government.

Background on TANF and SSI

TANF provides federal grants to states to support programmes assisting low-income families with children; states retain broad discretion over fund administration within federal requirements. SSI is a federal programme providing monthly payments to eligible individuals with limited income and resources who are aged, blind, or living with disabilities. The Social Security Administration administers SSI, while states may provide supplementary payments and perform related functions.

With grant agreements now set to be revised, state governments across the country face a near-term compliance deadline that will test the limits of federalism and immigration law simultaneously.