WI23-03: Social Security Administration’s Growing Interest in the Child Tax Credit and Other Child-Driven Income Support Program

We use the March 2022 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) to assess distributional diferences related to income and poverty, racial diferences, and geographical diferences among Social Security (SS) program benefciaries with children who report Child Tax Credit (CTC), Supplemental Nutrition Assistance Program (SNAP), Economic Impact Payment, or Earned Income Tax Credit (EITC) receipt for 2021. Our research suggests that as many as half of the SS program participants living with children under age 18, newly eligible to receive the expanded CTC in 2021, did not beneft from that expansion. The project estimates the number participating in these programs and, poverty rates excluding and including program benefts, and it simulates poverty rates under CTC policy alternatives, with an eye to “grandfamilies” where OASI recipients are raising their grandchildren, and SSDI and SSI benefciaries with eligible children who are not benefting from the CTC and other child-related beneft programs beyond SS programs alone. We fnd that the large majority of SS benefciary units with children receive benefts from the CTC in 2021, however, participation was notably low among SS benefciary units where children are living solely with their grandparent or another relative. CTC and EIP benefts are the relatively most efective programs at reducing poverty due to near universal eligibility and large beneft amounts. We demonstrate the added poverty impacts of the ARPA CTC compared to the current CTC and proposed CTC that expands current benefts to all lower income units regardless of work. The American Rescue Plan Act (ARPA) CTC was more efective than the current Tax Cuts and Jobs Act (TCJA) CTC at addressing poverty among SS benefciary units with children and led to larger reductions in the poverty rate. The existing $2,000 CTC maximum beneft, extended to families with incomes below $35,000 also generates substantial anti-poverty efects while highlighting the importance of removing any earnings restrictions on parents in SS benefciary units. Our fndings ofer insights into which groups to target with outreach to increase public assistance program participation, how SS benefciary families with children are participating in multiple programs, and the optimal design of the Child Tax Credit to enhance economic well-being for this population.