At the beginning of this month, around 1,500 children and 1,000 adults living in poverty in Arizona lost cash assistance and now are permanently barred from the state’s welfare program.

Arizona is the first state in the country to end welfare benefits after one year, meaning that a family—typically a parent or a relative with at least one dependent child—who has already used 12 months of cash assistance will be cut off permanently.

The approximately 2,500 individuals who lost benefits July 1 represent roughly 10 percent of the children and one-quarter of the adults who receive Arizona’s funds from a federal block-grant program known as Temporary Assistance to Needy Families (TANF). They may, however, still qualify for benefits like Supplemental Nutrition Assistance, Medicaid, and other assistance.

Arizona had previously provided two years of cash assistance, but Arizona lawmakers and the state’s Republican governor recently agreed to cut the time limit in half to help plug a projected $534 million budget hole in 2016 and shift the money to state child welfare programs. The state expects to save $3.9 million annually with the 12-month limit, according to a spokesperson from the Arizona Department of Economic Security, which runs TANF.

Supporters of Arizona’s new one-year limit, such as former state Sen. Kelli Ward (R-Lake Havasu City), who’s challenging incumbent Sen. John McCain (R) in the August primary, said the cut will “encourage the able-bodied to treat welfare like a safety net rather than a hammock.”

Critics have called it “an aggressive and intentional effort to undermine support for vulnerable families,” as Cynthia Zwick, executive director for the Arizona Community Action Association, put it for the Arizona Republic.

The average Arizona family in the program received $201 in May 2016, according to a state report, an amount that is less than half of the nationwide average monthly benefit of $429. To qualify in Arizona, a family of four generally cannot earn more than $2,584 a month, although that varies and is based on multiple factors.

In May 2016, before the new time limit kicked in, 15,581 children and 4,139 adults in Arizona received cash assistance, totaling $1,841,672.

A federal block-grant program, TANF was enacted under former President Bill Clinton in 1996 with the aim of “end[ing] welfare as we know it.” TANF allows up to five years of benefits, but gives states wide latitude with those benefits, as long as their TANF spending meets at least one of four official goals: providing cash aid to needy families; promoting job training, work, and marriage; reducing out-of-wedlock pregnancies; and increasing the number of two-parent families.

In the 20 years since the program’s enactment, what’s happened is a marked and ongoing plunge in cash assistance to families in poverty, as states, like Arizona, spent TANF money elsewhere.

Arizona, for example, has shifted TANF money to its underfunded child welfare programs, as the Phoenix-based Morrison Institute for Public Policy noted in its 2015 report. Ohio funds faith-based crisis pregnancy centers with TANF dollars, with the ostensible goal of reducing out-of-wedlock pregnancies. Oklahoma, meanwhile, spends TANF dollars on marriage counseling.

Roughly 55 percent of impoverished Arizona families received TANF benefits in 1994-95, a number that plunged to 9 percent in 2013, as the Morrison Institute noted in its 2015 report. Arizona’s latest reduction is the fourth since 2009, as the report noted.

Anticipating the cuts, representatives from the state DES said recently in a statement that state contractors have found jobs for more than 1,500 individuals who were in danger of losing benefits because of the new one-year cap.

Arizona outsources its job training and placement to two private companies, MAXIMUS and Arbor/ResCare Workforce Services. The DES also reported that an additional 245 individuals have gained work experience, and more than 450 have participated in community service activities with employers.