Supporting children and families through the pandemic, and after: The case for a US child allowance.

The COVID-19 pandemic has precipitated a contraction in economic activity that is unprecedented in both its nature and speed. In doing so, it has exposed who is protected and supported by modern welfare states, and who is not. While the US has a relatively robust set of social insurance and assistance programs for older Americans and working-age Americans who become unemployed or disabled, it lacks - in contrast to many other wealthy nations - a comparably strong universal or wide-reaching mechanism to support families with children. The US emergency relief packages enacted to date will undoubtedly mitigate the economic effects of the current crisis for many families, but because this legislation relies on the existing social policy infrastructure, its intended cash relief reinforces current inequalities and underserves families with children, with a particular impact on immigrant families and families of color. To protect all families with children through the immediate crisis and beyond, existing gaps and inequities in the US social safety net must be addressed. The creation of a national US child allowance offers a concrete and evidence-based way in which to do so. This analysis outlines key shortcomings in the existing system of US public support for families with children, the ways in which these shortcomings have been exacerbated in the COVID-19 economic response package to date, and how a national child allowance can provide the immediate relief families need during the pandemic and the unfolding economic downturn, as well as lay the foundation for positive health and development for all children in the years to follow.

The COVID-19 pandemic has precipitated a contraction in economic activity that is unprecedented in both its nature and speed. In doing so, it has exposed who is protected and supported by modern welfare states, and who is not. In the United States (US), daily news coverage illustrates in excruciating detail how women, people of color, immigrants, and children and families with low incomes are at greatest risk of economic insecurity, illness, and in some cases death during this pandemic. The US system of social supports helped create these life-threatening inequities, as many public programs are designed and administered to serve particular groups and exclude many others. While the US has a relatively robust set of social insurance and assistance programs for older Americans and working-age Americans who become unemployed or disabled, it lacks a comparably strong universal or wide-reaching mechanism to support families with children. The supports that are in place for children and families provide much-needed resources, but are not comprehensive and systematically underserve families of color, immigrant families, and families with the lowest earnings – if they serve them at all.

The underdevelopment and inequities of US child and family policy can be traced back to the New Deal in the 1930s, when key pillars of the modern welfare state were enacted amidst the ravages of the Great Depression. Because powerful southern lawmakers were preoccupied with perpetuating White supremacy and exploiting the labor of Black families during this era, New Deal income supports for families with children were limited (Katznelson, 2013; Gordon, 1994). To this day, the US invests significantly less in programs to support families with children than other wealthy nations and lacks one of the most prevalent social policy tools: a national child or family allowance (The National Academies of Sciences, Engineering, and Medicine, 2019).

The absence of a robust system of supports for families with children is driving inequality in the age of COVID-19. Columbia University’s Center for Poverty and Social Policy projects that Black and Hispanic individuals and children of all racial and ethnic groups will be pushed into poverty at higher rates as pandemic-related unemployment grows (Parolin & Wimer, 2019). The emergency relief packages enacted to date will undoubtedly mitigate the economic effects of the current crisis for many families, but because this legislation relies on the existing social policy infrastructure, it will reinforce current inequalities, and underserve families with children, and immigrant families and families of color in particular.

To protect all families with children through the immediate crisis and beyond, we must address existing gaps and inequities in the US social safety net. The creation of a national child allowance offers a concrete and evidence-based way in which to do so. The following sections outline key shortcomings in the existing system of US public support for families with children, how these shortcomings have been exacerbated in the COVID-19 economic response package to date, and how a national child allowance can help children and families survive and recover from the current crisis now, and build and enjoy economic security in the future.

The problem: An insecure system for children and families

The US social safety net for families with children prevents and reduces the severity of poverty for millions of children (Fox, 2019). But this system is a patchwork collection of disparate, highly targeted, and heavily means-tested programs lacking a uniform eligibility criteria or delivery mechanism. To the extent there is an organizing principle to these supports, it is the way in which they condition children’s access to many cash and near-cash benefits on the employment status of their parents. This focus was a culmination of decades of often overtly racist and sexist debates over work and welfare that came to a head in the 1990s (Minoff, 2020; Kornbluh & Mink, 2018; Orloff, 2002). In 1996, Congress replaced the New Deal-era program of cash assistance for families with children with Temporary Assistance for Needy Families (TANF), a block grant to states to provide time-limited cash assistance conditioned on work. Congress has also since significantly expanded the Earned Income Tax Credit, supplementing the wages of low-paid workers; introduced and expanded the Child Tax Credit, offering tax benefits to working families with children above a certain income threshold; and expanded the Supplemental Nutrition Assistance Program (SNAP), or food stamps, providing near-cash benefits that help families cover a major expense. Together, these programs constitute a “work-based safety net,” which provides a modicum of security to many working families, but much more limited support to families with very low or no earnings, who require income support the most (Tach & Edin, 2017). Because these benefits are tied to work, moreover, they also are less effective at supporting families when there is no work to be had—such as during the current pandemic-related downturn.

Many of these policies are also explicitly designed to exclude immigrant families. Social policy was re-envisioned in the 1990s when well-funded anti-immigrant think tanks began to exert more influence in Washington and a resurgence of nativism was shaping state and local politics (Denvir, 2020; Kulish & McIntire, 2019; Sanchez, 1997). Ultimately, undocumented immigrants as well as many lawful permanent residents, or green card holders, were excluded from TANF, SNAP and other basic supports (Fix & Zimmerman, 1998). This anti-immigrant movement has strengthened in the years since, with President Trump making the exclusion of immigrants from social supports a central focus of his administration. The President’s signature Tax Cut and Jobs Act barred families from claiming the Child Tax Credit if children do not have Social Security Numbers and the administration has advanced rulemakings designed to discourage immigrant families from accessing supports to which they are entitled—such as the public charge rule, which went into effect just as the pandemic hit the US. (Houshyar & Martin, 2019; DHS, 2020; Megan, 2017)

In addition to such specific exclusions, the social safety net ultimately serves far fewer families with children than those in need due to structural, financing, and administrative limitations. Two-thirds of US public spending on children is at the state and local level and balanced budget requirements and limitations on borrowing restrict this spending, especially during economic recessions (Isaacs, 2018; Rueben & Randall, 2017). Even within many of the programs funded primarily by federal dollars, including SNAP and TANF, eligibility and coverage vary by state, and states can limit eligibility to these programs for both political and budgetary reasons. The result is that in many states, families are underserved by programs designed to meet basic needs, and there are significant disparities across states, which compound disparities by race and ethnicity (O’Hare et al., 2012). In a similar vein, many critical programs are funded by the discretionary part of federal and state budgets, with capped funding levels requiring annual appropriations and often unable to serve all in need. Finally, in distinct contrast to other wealthy nations, the US relies heavily on the tax system to deliver many of its most powerful family income supports. More than one-third of all US spending on family benefits takes the form of tax benefits; by contrast, the United Kingdom delivers less than five percent of their family benefits this way (Isaacs, 2018; OECD, 2006). The Earned Income Tax Credit and the Child Tax Credit are the largest tax expenditures on families with children and the most effective at reducing poverty, in part, because they are federally-funded entitlements, with no funding cap or required legislative appropriation. But they put an onus on families to engage with a complex tax system, even when their earnings may be so low that they are not otherwise required to do so, and provide less support to families who need it most because they phase in as earnings rise. One-quarter of families who are eligible for the Earned Income Tax Credit do not receive it and one-third of all children are excluded from the full Child Tax Credit because their family incomes are too low (IRS, 2019; Collyer, Harris, & Wimer, 2020). Moreover, the support families do receive from these tax credits comes just once a year, at tax time, and cannot help families meet unexpected expenses, such as those resulting from the current crisis (Halpern-Meekin et al., 2015).

Emergency legislation falls short for families with children

The emergency response provisions for family economic relief passed to date, in the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, represent a critical infusion of public resources. The extent of their impact on reducing hardship for families is not yet known, but the cash provisions – in particular, the expansion of unemployment insurance and the emergency cash payment – will make a difference. In the face of an unfolding economic recession and an as-yet unsolved public health crisis, however, their efficacy is constrained by their time-limited or one-off nature and the fact that their design reflects many of the oversights and structural shortcomings of existing US social policy, particularly for children and families.

The unemployment expansions (NELP, 2020) represent the larger and more regular cash support made available by recent legislation. They offer recipients the chance of significant relief, but as only some states provide supplemental unemployment benefits for dependents, they are not tailored toward the needs of families with children (NELP, 2004). Moreover, as in many other safety net programs, the accessibility and adequacy of benefits varies from state to state and immigrant families face additional barriers: undocumented workers are excluded, and immigrant families who are otherwise eligible may hesitate to access the benefits in fear that receipt will ultimately violate public charge restrictions and jeopardize their legal status.

The one-time emergency cash payment, also known as the recovery rebate or stimulus check, reflects additional structural limitations of the US safety net. While accessible at the same rates nationwide, the maximum benefit for an eligible child ($500) is less than half the maximum benefit for an eligible adult ($1200)1 and the payments are not available at all for older teenagers and young adults in high school and college or older adult dependents with serious health issues. As a result, the means-tested payment can provide less support for families with children than it does for adult-only households. A two-adult couple with no children ($2400 maximum benefit) will receive more than a family with one-adult, two-children aged up to 16 ($2200 maximum benefit). A family of three composed of one adult, a 17-year-old high school student, and an 18-year-old college student would receive a maximum benefit of just $1200.

The emergency payment also exemplifies some of the key drawbacks of delivering support through existing systems. The US social security, disability, and veterans’ support systems were mobilized to deliver the emergency cash payments to eligible recipients of those programs, but the streamlined access for adults in these systems does not extend to their dependents. Those who need to claim the $500 payment for their children were told, with just days’ notice before a newly imposed deadline, that they must complete an online application (requiring an electronic device and internet access) (IRS, 2020; Jacoby, 2020). Families who do not receive one of these benefits, meanwhile, have to rely on the tax system to receive their payments, which may be slow and cumbersome depending on their filing circumstances. Families without tax liability who did not need to file taxes must also complete an online application requesting the payment. Families who do not have a bank account linked to the Internal Revenue Service or US Treasury for direct deposit will have to wait longer for a paper check to arrive in the mail. Many immigrant families will be unable to claim the benefit altogether because the legislation carves out a particular restriction against those who file taxes with an Individual Taxpayer Identification Number (ITIN), rather than a Social Security Number. If just one adult filer in the family holds an ITIN, the entire family loses access to the emergency payments, even if their spouse or children hold Social Security Numbers and/or US citizenship.

Part of the solution: A US child allowance

The US approach to economic relief for families stands in stark contrast to other wealthy nations. While the US has relied on the unemployment insurance system to support laid-off workers, many wealthy nations have instituted some version of employee-retention business support and wage-replacement schemes in an attempt to keep workers employed (Apuzzo & Pronczuk, 2020). COVID-19 emergency cash payments differ in size and scope across countries, but most wealthy nations have an important existing policy tool that provides regular support to families with children and can be used as a mechanism for delivering additional temporary relief: a national child allowance.

A child allowance is a universal or wide-reaching cash payment meant to help defray the costs of raising the next generation (Shaefer, et al., 2018). Many other wealthy nations established child or family allowances in the 1940s and 1950s, paralleling earlier-instituted pension systems for older citizens, and in partial recognition of the inadequacy of market wages alone to support a family with children. Benefit amounts were not always generous, but – paid out on a weekly or monthly basis – functioned as a consistent supplement to household budgets that reached a broad swath of families. Children are registered for the child allowance at birth, so families receive support as soon as they begin incurring additional expenses; the benefit often continues until children turn 18, so long as they are in full-time education. Benefit values have increased over time, with significant expansions in some countries in recent decades. Ireland’s Child Benefit increased 360 percent in real terms between 1987 and 2007 (Cousins, 2007) and is currently valued at close to 150USD [140EUR] per child per month; in 2016, Canada redesigned their Child Benefit program to deliver payments that are, on average, 1.5 times higher than before the re-structure and pay a maximum monthly benefit of approximately 381USD [CA553.25] per child under the age of 6 and 322USD [CA466.83] per child aged 6 to 17 (Government of Canada, 2020).

Research from countries where child allowances are well established shows that families spend this additional income on items to meet their children’s basic needs (Curran, 2019). Child allowances reduce child poverty and are associated with improved educational outcomes for children and improved physical and mental health for children and parents (Gregg et al., 2006; Jones, Milligan, & Stabile, 2019; Milligan and Stabile, 2011). Even before the current crisis, a 2019 landmark report from the National Academy of Sciences found the creation of a US child allowance would do more to reduce child poverty than any other policy considered (The National Academies of Sciences, Engineering, and Medicine, 2019).

Missing from the US COVID-19 emergency response to date, as well as the US social safety net as a whole, is a similar universal (or near-universal) cash support for children and a system through which to deliver it to families with ease and regularity. A US child allowance could provide consistent and meaningful support to families at all times and distributed weekly or monthly via directly deposit into bank accounts; onto electronic benefit transfer (EBT) cards, the debit cards that states currently use to distribute food and cash assistance to families; or picked up in cash at an easily accessible location, such as a post office. During economic downturns or other emergencies, such as the current COVID-19 crisis, this infrastructure could be used to deliver temporary emergency top-ups to help families meet their unexpected needs, quickly and easily.

Canada provides a useful example of how a child allowance program can be mobilized to deliver rapid support. In mid-March, Prime Minister Trudeau announced a temporary increase of Canada’s child allowance as one of a number of COVID-19 fiscal stimulus measures (Prime Minister of Canada, 2020). The US temporarily expanded basic supports in a similar way during the Great Recession, when Congress increased families’ monthly SNAP benefits (USDA, 2009). Researchers found this increase not only helped families make ends meet, but was one of the most effective forms of stimulus spending, as it also significantly increased employment (Penderet al., 2019). A temporary boost in SNAP would help families with children in the current crisis. But SNAP is not a complete substitute for cash, and it does not help cash-strapped families cover their other expenses, whether they be face masks, home educational resources, or rent. Moreover, because of SNAP’s strict means test, it does less than it could to prevent families from falling into poverty. A child allowance could help families across a range of income levels cover a broader spectrum of their expenses, while promoting economic security and stability over the long run.

Ensuring a child allowance advances equity

Establishing a child allowance would provide critical support for children and families, helping them survive the current crisis and recover and thrive in the years ahead. There has been bipartisan support for reforming the existing Child Tax Credit so that it functions more like a child allowance and provides more support to families with the lowest incomes. For a US child allowance to make the safety net more equitable, however, it needs to be designed to improve upon existing policies’ structural shortcomings and meet the needs of all families. This requires attention to eligibility and benefit levels, as well as financing, administration, and benefit delivery.

If a child allowance is included in future COVID-19 economic recovery legislation, it should be informed by scholars’ evidenced-based recommendations (Shaefer et al., 2018; Curran, 2015) and designed according to the following principles: (1) federal program administration with a nationally-uniform benefit level (with the option for states/localities to provide supplemental top-ups); (2) universal or near-universal reach, so that the benefit is available to families of all income levels or reduced (or fully phased out) only for families with the very highest incomes, with no minimum income requirements and independence from the employment situation of adults; (3) equal, per-child payment amounts that meaningfully support the costs families incur raising children, automatically adjust for cost of living, and are delivered regularly (e.g. monthly or semi-monthly); (4) access to the allowance for all children, regardless of immigration status or particular family type; (5) flexibility in payment delivery depending on family circumstances (e.g. direct deposit, EBT top-up, cash allotments through post offices, or other suitable alternatives); and (6) independence from interaction with other social safety net supports (e.g. receipt will not impact families’ access to means-tested public programs).

A child allowance organized by these principles will not only provide the immediate relief families need during the pandemic and the unfolding economic downturn, but it will help lay the foundation for positive health and development for all children in the years to follow.

Conclusion

The pandemic has wreaked havoc on families’ economic security and as car lines snake around food banks in urban, suburban, and rural areas alike, there is no immediate end in sight (Heierholz, 2020; Kulish, 2020). The crisis has also exposed profound inequities in the social safety net, as families with children are less effectively supported than many working aged and older Americans, and families of color and immigrant families are systematically underserved and excluded. Lawmakers can both meet families’ current needs and redress these systemic inequities by enacting a child allowance. The child allowance would be an ideal mechanism to provide additional emergency support to families through the extent of the economic recession. When the economy improves, the allowance can then be scaled back to a level that will continue to provide a minimum, but crucial, income floor for children always.

CRediT authorship contribution statement

Megan A. Curran: Conceptualization, Investigation, Writing - original draft, Writing - review & editing, Validation, Project administration. Elisa Minoff: Investigation, Writing - original draft, Writing - review & editing, Validation.