BEYOND THE NUMBERS
Last year, states took important steps to provide unrestricted income assistance to low-income families with children to help them better make ends meet. In 2024, they should continue building on that momentum to help position children for a better start in life and to strengthen their families and communities as a whole.
Income assistance can be a tool that helps families solve everyday financial challenges and build a strong foundation for their future. Research and experience show that when cash is available to families who need it, kids have improved outcomes across several measures of health, educational attainment, and overall well-being. Furthermore, income assistance is one of a number of strategies that have improved economic security and reduced racial inequities over the past five decades. Stronger federal, state, and local cash assistance policies and programs are needed to continue to make progress on reducing the poverty rate and closing income-related racial disparities which, without action, can seem intractable.
Several states have recently advanced policies that provide unrestricted income assistance to families. Those policies include:
- Rx Kids in Flint, Michigan. In 2023, the state legislature approvedapproved a five-year pilot, partially funded with federal Temporary Assistance for Needy Families (TANF) dollars, to provide one-year unconditional cash allowances to families in Flint who are expecting the birth of a child. Beginning in 2024, all families will receive a $1,500 prenatal cash allowance and $500 per month for the first year of the child’s life. Over half of children in Flint live below the federal poverty line; for a family of four, this means earning less than $30,000 annually. These payments are meant to address disparities in income, health, and opportunity in a city that has seen years of harmful disinvestment — fueled by systemic racism and other inequities that contributed to the water crisis it experienced in 2014.
State child tax credits. Like the federal Child Tax Credit, state child tax credits reduce child poverty and improve outcomes for children in the near and long term. In 2023, three states created new permanent child tax credits, one state created a one-time child tax credit payment, and eight states improved existing child tax credits by either increasing the size of the credit or expanding eligibility. Because people of color, women, and people who have immigrated to the U.S. are overrepresented in low-paid work and in families with little to no earnings — due in part to discrimination, bias, and other structural barriers to opportunity — well-designed state child tax credits are important tools for advancing equity.
Last year, Minnesota created the largest child tax credit of any state to date. It will be worth up to $1,750 for each qualifying dependent under age 18, and it is available to immigrants who file taxes with an Individual Tax Identification Number. Almost 300,000 households — including 513,000 children — are projected to benefit.
- Clothing allowances in TANF. States can use the flexibilities available to them in TANF to provide more cash to families to address one-time needs that occur (even if designated for specific uses). This is sometimes necessary because TANF cash monthly benefit amounts do not meet families’ basic needs. Recognizing that children can quickly outgrow clothes and that seasonally appropriate clothing is necessary, Oregon now offers all TANF families a clothing allowance of $270 at the beginning of school, in the winter, and at the start of summer. Massachusetts increased families’ annual clothing supplement for each child from $350 to $400 in the 2023 budget and then to $450 for 2024.
Another promising strategy to provide unconditional cash to people and families is guaranteed income, which many localities are exploring. States can also consider opportunities to support these pilot programs, including providing funding for additional pilots, supporting quality evaluations, and disregarding assistance received through guaranteed income pilots from eligibility determinations for public programs when they have the authority to do so. One such example is California’s Guaranteed Income Pilot Program, which provides grants to pilots and projects providing guaranteed income to participants.
A large number of studies conclude that income assistance helps children grow up healthier, perform better academically, go further in school, and earn more later in life. A Columbia University study found that for every $1,000 provided to families with children, society reaps $5,603 in benefits, particularly from children’s increased future earnings and better health and longevity. Additional research compiled by Chapin Hall at the University of Chicago also suggests that providing economic and concrete supports to families helps make homes safer and more stable for kids, which, among other positive outcomes, helps families avoid or reduce involvement in the child welfare system.
In 2024, policymakers have an opportunity to build on the recent progress states have made and use existing strategies like child tax credits, guaranteed income, and the TANF program to increase unrestricted income assistance to families.