The ARPA
In response to the COVID-19 pandemic, the United States engaged in an innovative policy experiment: for one year, the federal government expanded the existing child tax credit—making it available to families with little or no earnings, increasing the credit amount, and providing monthly payments instead of an annual payment at tax time.
In spring 2021, Congress passed the American Rescue Plan Act (ARPA).
For a full overview of ARPA’s provisions, visit the U.S. Department of the Treasury: ARPA Fact Sheet.
ARPA increased the credit available to parents, especially for families with young children.
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ARPA created a monthly payment schedule from July through December 2021, automatically sending payments to families who had filed taxes, including those who received the stimulus payments, unless they opted out.
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Families became eligible for $300 per month for each child younger than six years old, and $250 per month for each child ages six through 17.
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ARPA made the child tax credit “fully refundable,” allowing families to access the credit even if they had limited or no earnings.
This expanded child tax credit was incredibly effective: child poverty went down by a record-breaking amount, lifting an estimated 2.9 million children out of poverty. According to the U.S. Census Bureau, the expanded credit lifted one million children under the age of six out of poverty, while it did the same for 1.9 million children between the ages of six and 17.
However, Congress failed to extend the expanded program, and it ended in January 2022.
How the American Rescue Plan Act Expanded Child Tax Credits
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The child poverty rate in 2019, as measured by the supplemental poverty rate, was 12.5%.
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This rate plummeted to 5.2% in 2021—the largest decline on record.
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New Census data shows a dramatic reversal, with the rate skyrocketing to 12.4% in 2022.
Researchers at Columbia University’s Center on Poverty and Social Policy calculated that 3.7 million more children fell into poverty due to the expiration of the child tax credit payments in January 2022.
Overall, Census data suggests that child poverty leaped to about 14% in early 2023.
Social Work Policy Makers
Although social work policy professionals do not make policy, they have influenced social policy from the outset of professional social work at the dawn of the 20th century.
Catherine Rampell, a public policy columnist for The Washington Post, was interviewed by PBS NewsHour and offered these insights:
“These numbers are astounding, I think, more than double the child poverty rate in 2022 that we saw in 2021…”
“If you look at the surveys conducted over how people had been spending those funds, it showed that parents primarily reported using the child tax credit dollars on things like basic household necessities, rent, childcare, school supplies, groceries.”
“And this was the first time that it became available to families with little or even no earnings… Your household got that funding too and was able to use it to pay for those necessities to be lifted out of poverty.”
The Poverty Problem
The number of people with incomes below the poverty line in 2022 rose a sobering 15.3 million, reflecting the expiration of pandemic relief programs including the expanded Child Tax Credit.
The rise in the poverty rate the largest on record in over 50 years both overall and for children—underscores the critical role that policy choices play in the level of poverty and hardship in the country.
The Center on Budget and Policy Priorities (CBPP) has extensively documented how policy design directly impacts child poverty rates.
The Policy Problem
In a free capitalist society, poverty is not easy to eradicate. On both sides of the aisle, Congress has always supported some form of child tax credit. Social policy influencers understand how Congress could let the ARPA expire after one year. The problem is in the details—not in the intention.
Key unanswered questions include:
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With the pandemic now in the rearview mirror, who will qualify for the child tax credit?
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Will the credit continue to be paid monthly, or is that too costly for taxpayers?
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Will tax returns still determine eligibility, or will unemployed and elderly caregivers still qualify?
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How will the amount of the credit be determined?
These policy complexities highlight the importance of ongoing advocacy, research, and bipartisan collaboration. Organizations like Child Trends and the Annie E. Casey Foundation continue to analyze the effects of child poverty policies and their long-term outcomes.
Never Forget
“Never forget” is the social work profession’s persistent reminder to policymakers:
policy choices shape lives.
Social work policy professionals keep the needs of vulnerable families at the forefront while others work through the legislative details. Poverty is not inevitable—it is shaped by decisions made in Washington.
