In the US, the Covid-19 pandemic has hit families with children the hardest. Households with children have been most likely to lose employment due to the pandemic. More than 40 percent of US families with children – and more than 55 percent of Black and Latino families – say they have trouble paying for basic expenses. Nearly one in five families report that they do not have enough food to eat.
To help US families, President Joe Biden’s $1.9 trillion “American Rescue Plan” proposes an emergency increase of the Child Tax Credit from $2000 per child to $3000 per child (and $3600 for children younger than 6). The impact could be huge. According to Columbia University researchers, the initiative – based on legislation introduced in 2019 by Senators Bob Bennett of Colorado and Sherrod Brown of Ohio – could move 4 million children out of poverty and boost incomes for millions of families.
Child allowances have been used by dozens of countries to reduce poverty for both children and adults. They increase children’s educational outcomes, improve their health, reduce child labor, and even lower rates of domestic violence. They are common in Europe and were instrumental in halving the UK’s child poverty rate.
Biden’s proposal allows families to opt for monthly payments, rather than wait for an annual lump sum at tax time. This way families can use the funds when they need to cover rent, food, and other basic needs for their children.
The plan also allows the poorest families to apply for the payments, even if they make too little to pay taxes. But requiring them to apply means that between 20 to 60 percent of eligible families may be left behind because they don’t know about the benefit, or how to access it. In the US, where 3.7 million households with children lack internet, online applications would be a huge barrier.
An increased Child Tax Credit will help millions. But child allowances shouldn’t be a short-term, emergency measure. Even before the pandemic, nearly one in six US children – and one in three Black children – lived in poverty. Congressional leadership is reportedly working on a plan to make increased monthly child allowances permanent. If they succeed, the results could be dramatic and long-lasting.