Photo by Greta Hoffman

We learned recently that improvements to the Child Tax Credit enacted in 2021 through the American Rescue Plan Act nearly cut our child poverty rate in half last year, leading to the lowest child poverty rate on record in the United States. This dramatic result meant that households had more money to provide food, clothing, and diapers for their children. It meant more money for child care, gas, and car repairs that helped parents get to work. It meant more money for educational resources, music or soccer lessons, or a trip to the zoo. 

It also meant reduced stress for many parents and caretakers, who reported that it gave them some breathing room, relieving them from the constant fear and distraction of how to meet the basic needs of their children.

Research out of the University of Washington suggests that this collective impact of tax credits for families may lead to a reduction in child maltreatment reports. Following receipt of the Child Tax Credit and Earned Income Tax Credit for the 2015-2018 tax seasons, new findings show a 5% decline in reports of maltreatment in the five weeks after distribution for each additional $1,000 that families received in refunds. 

What are the Child Tax Credit and Earned Income Tax Credit?

The term “child maltreatment” covers instances both of “child neglect” (where kids do not have the material items, supervision, education, or care that they need) and “child abuse” (which includes physical, sexual, psychological/emotional, and medical abuse). According to 2018 national data, more than 60% of children who were victims of maltreatment experienced neglect, while 10% suffered from physical abuse and 7% were sexually abused.

Child Maltreatment and Poverty are Too Often Conflated

The University of Washington findings build on substantial existing evidence regarding the impact of household financial difficulty on reports of child maltreatment. Chapin Hall at the University of Chicago’s synthesis of existing research on the role of economic hardship in child maltreatment found evidence that even modest economic supports can help to stabilize families.  A 2019 landmark study on child poverty from the National Academy of Sciences cites several studies that find that economic hardship results in increased psychological distress of parents, leading to harsh or detached parenting that can negatively affect children’s development and increase the risk of maltreatment.

A parent’s financial instability and hardship creates an increased risk of child neglect almost by definition. Economic hardship can strain a parent’s ability to provide for their children across multiple domains. When a family is struggling to pay for housing, they may also be struggling to obtain food for their children. Even searching for a higher paying job can put struggling parents in a bind, leaving them to decide whether to pay for safe, reliable child care or to leave the child unsupervised so they can pay for other necessities. 

However, neglect and poverty are too often conflated. Many reporters who misunderstand, or perhaps have a bias, report “neglect” when the real issue is poverty and lack of resources. Child Trends reports that nearly half of states do not specifically exempt poverty-induced deprivation from their definitions of child maltreatment, which makes children from poor families in these states more susceptible to being reported, investigated, and substantiated for child neglect. Children and households of color are at particular risk, and experience a much higher rate of child protection reports and investigations than their white peers.  

Very few reports of neglect are ever substantiated, meaning that upon an investigation, the agency cannot find enough evidence to include that a child was abused or neglected. 

Child protection services agencies, which operate in every state and in many counties, create a child maltreatment report when they receive sufficient information that a child (under 18) may have been abused or neglected. This information usually comes into the agencies’ child abuse hotline from mandated reporters (such as teachers, pediatricians, law enforcement), community members, parents, family members, and even children and youth. After creating a report, the agency will investigate the allegations and determine whether the evidence supports the allegation or not. If the agency finds that the child is at imminent risk of serious harm it can file a petition with the court to have the child removed from their home and placed into foster care or with a kin caregiver.

The research out of the University of Washington shows the impact of the CTC and EITC was most notable for child maltreatment reports and less strong for cases of substantiated child maltreatment due to the small number of substantiated cases that they captured. This is consistent with national trends.  

Other studies have found a reduction in certain types of substantiated maltreatment when parents and caregivers receive support: 

Child Maltreatment Reports are Disruptive and Traumatic for Families 

Families that earn less than 200% of the federal poverty line ($43,920 for a family of three in 2021) make up nearly 85% of families investigated for child abuse or neglect. In light of the existing data, this University of Washington study suggests that child neglect reports will decrease when parents have more economic resources. Decreasing child neglect reports is an important outcome that could generate multiple other positive outcomes for children and their families. 

Reducing the number of child maltreatment reports would decrease the number of children and families that experience the extremely disruptive and often traumatic event that is a child protection investigation. Investigations frequently involve government workers asking uncomfortable and invasive questions of children and their caregivers. Sometimes parents are frightened into consenting to strip searches for their children. Parents frequently have to miss work or other obligations to make themselves available to workers for interviews and home visits. Investigators search the homes of nearly 3.5 million children a year without obtaining warrants. Rarely do parents and children have legal counsel to support and advise them through the investigatory process which has very high stakes — the potential for the child to be removed from their home. Even if the allegations in the report are eventually unsubstantiated, the investigatory process takes a serious toll on the emotional, financial, and relational stability of families that are often already struggling. This is especially true for children and families experiencing poverty and living in areas of concentrated poverty whose families and social networks may also lack resources to help them weather difficult times. 

Reducing the number of child maltreatment reports also would allow agencies to redirect resources to accurately identify and appropriately respond to cases of substantiated maltreatment. When agency workers are required to investigate so many allegations rooted in poverty and a lack of material resources, they miss the opportunity to direct that time, expertise, and money toward thoroughly investigating allegations of abuse. The scarcity of time and resources can lead investigators to miss important pieces of evidence that can either separate children from families unnecessarily or leave children in situations that pose a serious risk of harm.

Congress: Please Act to Help Stabilize Families Without Delay

These findings should motivate Congress to take steps to reduce economic hardship and stabilize families. 

First, Congress needs to renew improvements to the Child Tax Credit and Earned Income Tax Credit without delay.

  • Improvements to the Child Tax Credit made in 2021 greatly increased the amount of the credit, made payments available monthly for half of the year, and allowed families with the greatest barriers to economic security to be eligible for the full credit for the first time. The expiration of these improvements at the end of last year has caused millions of children to once again experience poverty and hardship.  
  • Expansions to the Earned Income Tax Credit in 2021 made current and former foster and homeless youth (even if they are part-time students) eligible at age 18 rather than age 25, which could benefit an estimated 380,000 to 500,000 former foster youth. Expansions also lowered the age to 19 for other transition-age youth workers who are childless, and increased the amount of the credit for all childless workers. 

Second, Congress must follow the bipartisan lead of Reps. Carol Miller (R-WV) and Judy Chu (D-CA) who introduced the “Helping Households And Neighbors Distribute Services (HANDS) for Families Act,” which would provide a creative funding stream to increase access to family preservation services in the community.

Lastly, Congress should initiate an inquiry into the relationship between youth’s contact with the delinquency and criminal court systems and familial economic security generally, and the receipt of the Child Tax Credit and Earned Income Tax Credit, specifically. The costliness of court system involvement and the poor outcomes experienced by youth who enter are prime reasons for our nation’s leaders to address prison pipelines that start in childhood.