Families with children need cash during an economic crisis

The economic consequences of the ongoing COVID-19 (“novel coronavirus”) pandemic are likely to be particularly severe for low-income households. In times of economic distress or uncertainty, the Supplemental Nutrition Assistance Program (SNAP) and Unemployment Insurance (UI) programs are critical because they can provide timely additional income support for families. However, they do not reach the majority of households with children who are in poverty or near-poverty. Moreover, while SNAP benefits help with food budgets, they do not reach 20 million low-income children and they cannot be used to cover critical expenses such as rent, childcare, diapers, hand sanitizer or other necessities.

As schools and other institutions close and families lose earnings, providing cash to families with children is one way to ensure that all low-income families can meet their basic needs in the event of an economic crisis. A cash allowance for children or a fully refundable Child Tax Credit could reach all low-income children currently left out of SNAP, UI, and TANF. A “lookback provision” can also help families by allowing them to use their previous years’ earnings to calculate their Earned Income Tax Credit and Child Tax Credit, thus avoiding the aftershock of a smaller refund associated with the crisis year. In the case of stimulus checks, children should receive the same value as adults to account for the high costs of supporting children.