Researchers from the Center on Poverty and Social Policy at Columbia University measured monthly poverty rates throughout the COVID-19 pandemic. They use a supplementary measure of poverty that includes all taxes and transfers, including federal COVID-19 relief income supports such as stimulus payments and the improved Child Tax Credit (CTC) payments.
This data shows how effective cash assistance from tax credits and other pandemic relief has been in reducing child poverty, and the most recent data highlights the importance of improving CTC payments. The American Rescue Plan Act made key – but temporary – changes to the CTC, increasing the amount of funding available to families, expanding eligibility for low-income families, and changing the timing of fund distributions. Families now receive half of the funds in monthly payments that began on July 15, rather than as a lump sum when families file their taxes. Analysis by the Center on Poverty & Social Policy shows that the national child poverty rate fell from 15.8% in June 2021 to 11.9% in July after families began receiving CTC payments. The rate fell again to 11.5% in August as monthly CTC payments continued.
These monthly estimates provide a clearer picture of the real-time challenges facing families across the country. Poverty rates are most often an annual measure, but research shows that short periods of poverty can have long-term consequences for children’s well-being. These numbers reinforce the data that show food insecurity has decreased among eligible families after monthly CTC payments begin. These figures also add to the wealth of evidence that cash assistance is a crucial tool in the fight against poverty.