The Child Tax Credit program was enacted in 1997 as part of the Taxpayer Relief Act – and has proven beneficial for many low-income families. When the COVID-19 pandemic hit, so did the financial hardship, putting nearly every household in a difficult position.
In response, the American Rescue Plan provided the largest Child Tax Credit payment ever with automatic monthly payments of $250-$300 per child sent directly to families earning up to $150,000 for a couple or $112,500 for a family with a single parent.
This emergency action proved beneficial. For families with low incomes (earning $35,000 or less per household), the payments were spent on the following:
- Food (59%)
- Utilities (52%)
- Rent or mortgage (45%)
- Clothing (44%)
- Education costs (40%)
Others spent the money on vehicle payments, debt, childcare, and other basic expenses. The payments reached 61.2 million children by December 2021 – and slashed poverty rates by nearly 30%. While the last payments were delivered on December 15, 2021, they are expected to return in 2022 thanks to the Build Back Better Act. Unfortunately, there’s no known timeline, putting many families – and community organizations – in the difficult position of trying to fill the gaps.
Rallying together, we can provide more comprehensive support to families
The COVID-19 virus may be waning, but there’s no denying the severe impact of the pandemic on the economy. Many families have been unable to find affordable or even accessible childcare, have lost work, or found themselves facing food insecurity, housing instability, and homelessness for the first time.
While community organizations are working year-round to provide free or lost-cost food, housing, childcare, and other social services to these individuals, public health emergencies have and will continue to drive the demand beyond capacity. Now that the extended Child Tax Credit payments have ended, community leaders are put in the disadvantageous position of having to turn away clients – or refer them elsewhere – due to limitations in finances, resources, and staff.
The only way to buoy these families in their greatest times of need is to re-imagine the infrastructure in which they’re cared for and how it exists on a national, regional, and local level. Long-term support requires comprehensive and collaborative care that spans the government, healthcare, community, and social services sectors.
We know that government assistance can keep families out of poverty, but we also know that government programs aren’t comprehensive enough to address a family’s every need. SNAP benefits, for example, are the main form of nutrition assistance for low-income families, but many don’t qualify, and even among those who do, the financial support isn’t adequate to keep families healthy and food secure.
To properly meet the needs of families around the country, we need to address social drivers of health on a greater level and through a multi-prong approach. Aligning the state with healthcare, community, and social service providers is no easy feat, but is a necessary next step in ensuring quality care for families. Beyond basic government assistance, we need long-term, sustainable solutions and more alignment across sectors to enable better care coordination and delivery.
Changing the future of care for families across the country
When the Build Back Better bill is passed, the emergency payments should resume and among those who expect a future payment, 75% said they would use the money to build emergency savings, 67% said they would use it for routine expenses, and 58% said they would use it for essential items for children. But eventually, this public health emergency will end – and another one will come along. How do we make advancements today to ensure a better future for the next generation?
In August 2021, more than 700 state and local organizations called on Congress to expand the Child Tax Credit program permanently, which would be an innovative, important advancement in poverty prevention. This may be considered – and one day approved – but will take years to enact. In addition to advocating for policy changes, we must focus on improving the current systems.
What we’ve learned throughout this pandemic is that there’s no one-size-fits-all approach to addressing social drivers of health, because each community is unique and requires customization. By building lines of communication and new partnerships between health plans, health systems, state agencies, Continuum of Care (CoC) programs, 2-1-1s, and community-based organizations, we, at WellSky, are creating a new infrastructure in which social barriers can be properly addressed and families can be protected when public health emergencies occur.
When basic human needs are met, homelessness, food insecurity, and poverty can be avoided. To learn more about Healthify, powered by WellSky’s solutions to support children and families in times of need, request a demo here.