CTC Work Requirements Would Reduce Access for Many - The Center for Law and Social Policy

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By Ashley Burnside 

Since July, families have been receiving monthly payments of up to $300 per child for children ages 0-5 and up to $250 per child for those ages 6-17. These payments are part of a temporary expansion of the Child Tax Credit (CTC) under the March 2021 American Rescue Plan. The payments help parents and other caregivers afford expenses for their children like bills, clothing, and food. About 35 million families started receiving monthly payments in July, and food insufficiency rates among families with kids have dropped. But these CTC expansions are only for 2021, unless lawmakers act.

The House Ways and Means Committee released bill text earlier this month that would extend many of the CTC expansions until 2025. The proposed bill would also make the full refundability of the CTC permanent, which ensures that the lowest income families can access the credit. Extending these CTC changes would benefit children for years to come and would have dramatic impacts in reducing child poverty, especially for children of color.  

Senator Joe Manchin (D-WV) recently suggested that the expanded CTC should be tied to work requirements to ensure it goes to “the right people.” This sentiment is rooted in problematic assumptions about who is ‘deserving’ of financial support based on whether someone is working. It also invalidates the very important work of raising children. Stay-at-home caregivers are working, even if it isn’t connected to receiving a W-2 form.  

Attaching work requirements to the expanded CTC benefits would deny the credit to many of the people who need it the most. This would leave children, families, and our communities worse off. Here’s just a few populations that would be left out if the CTC included work requirements: 

•  1. Children of Workers Who are Paid Low Wages in the Gig Economy 
• An estimated 10 percent of workers rely on gig work as their primary source of income. Workers who are a part of the gig economy make critical contributions to our economy, yet they also often have unpredictable hours and unpredictable income, in part because of the way that companies’ scheduling platforms can exert control and take workers’ income. Workers who rely on gig work as their primary source of income face greater financial hardship than their counterparts who hold traditional employment.  
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• Such instability would make it hard for gig workers to meet a work requirement in the CTC. They could be denied the CTC payments altogether if W-2 earnings are required. Receiving reliable monthly CTC payments would provide key financial stability for these working parents to help them pay for recurring expenses like rent and bills, even in months when they had low earnings. If the credit is not fully refundable, workers with variable hours may also fear they will owe money at tax time if they don’t earn enough over the year to receive the full credit.
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• 2. Children of College Student Parents 
• To get a job that pays a living wage and provides a pathway out of poverty, having a postsecondary degree has become increasingly important. Anti-poverty policies should support parents if they choose to complete postsecondary education to help them find higher-paying jobs to support their families. Going to school is a long-term investment in economic security for both parents and their children. But student parents would also be burdened by a CTC work requirement. Student parents would be unable to meet a CTC work requirement unless they balanced caregiving, working, and attending their classes.
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• Nearly one quarter of college students are parents raising children. Student parents are more likely to be students of color, to be older than their peers who aren’t parents, and to have higher student loan debt. Black student parents have especially high rates of debt compared to their counterparts. Monthly CTC payments would especially benefit student parents as they try to meet their month-to-month expenses while obtaining a degree. 
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• 3. Children with Disabilities and Children of Parents with Disabilities  
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• Both parents with disabilities and parents who have children with disabilities would face many barriers in meeting a CTC work requirement. One in four U.S. adults have a disability, and 29 percent of the U.S. population is providing care for a person who’s chronically ill, a person with a disability, or someone who is elderly. People with disabilities face poverty at more than twice the rate of those who don’t have disabilities, and Black people with disabilities face even higher rates of poverty. Families that are caring for a child with a disability are also more likely to experience material hardship. Many caregivers are forced to take leaves of absence from their jobs—or to even end their job altogether—to provide care for a loved one with health impairments or a disability.
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• Parents who have children with disabilities may have extreme difficulty balancing work and the unique caregiving needs of their child. This may force parents into unstable hours or seasons of unemployment, resulting in them losing eligibility for monthly CTC payments when they would need them most. The same is true for parents who have disabilities. Their unique health circumstances may force them into leaves of absence or bouts of unemployment. The monthly CTC should support parents in these times of financial uncertainty, not cut them off. 

These represent just a few populations who would be left out from the expanded CTC benefits if lawmakers added a work requirement.  Congress must not add a work requirement to the CTC. All caregivers deserve support to help them raise their kids, and all children deserve financial support, regardless of parents’ work circumstances and ability to work.  

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CTC Work Requirements Would Reduce Access for Many - The Center for Law and Social Policy
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