Monthly Poverty Rate by age group

Child poverty rate declined to 11.5% in August as newly expanded child tax credit payments begin to be paid monthly.

Estimated monthly poverty rates by age group, U.S.

Supplemental poverty rate (all taxes and transfers included)

Source: Center on Poverty and Social Policy at Columbia University and Census Bureau, PEP. Notes: These monthly estimates are based on the supplemental poverty rate, which includes after-tax income and in-kind benefits. These estimates also include the impact of economic impact payments (stimulus checks), as well as expanded unemployment, SNAP, and other benefits.

Estimates of monthly poverty rates during the pandemic highlight the benefit of annual Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) payments for children and working-age adults. They also illustrate how stimulus and expanded unemployment payments reduced financial hardships, particularly for children. But these payments were sporadic, such that the child poverty rate increased to above pre-pandemic levels throughout the latter half of 2020. The 2021 American Rescue Plan includes new monthly CTC payments starting in July 2021. CTC payments reduced child poverty to 11.9% in July, and 11.5% in August. CTC payments will continue through December 2021.

Social Security, by far the largest American safety net program, was enacted after the Great Depression to stabilize the financial well-being of the elderly. But the program originally excluded domestic and agricultural workers — a large share of whom were Black.¹ Unemployment insurance and Aid to Families with Dependent Children (commonly called “welfare”) programs were also enacted in 1935. Programs designed to provide assistance to non-elderly low-income Americans, including Head Start, food assistance programs, and the EITC were instituted in the 1960s and 70s.² Welfare was reformed in 1996 to include work requirements but CTC provided some support to families with children starting in 1998 regardless of work status.³ For 20 years, the CTC received strong bipartisan support and was increased several times, most recently in 2018.⁴ Studies of CTC’s impact found that this financial support for children helped increase student test scores, reduce teen birth rates, and yield higher earnings in adulthood.⁵

In 2019, $1 trillion was spent on Social Security. In contrast, $360 billion was spent on safety net programs such as the EITC, CTC, unemployment insurance, food assistance and child care.⁶ Still, these later programs are credited with reducing the poverty rate from 26% in 1967 to 14% by 2017 (once all such transfers are included).⁷

1. “The Decision to Exclude Agricultural and Domestic Workers from the 1935 Social Security Act”. DeWitt. Social Security Bulletin. https://www.ssa.gov/policy/docs/ssb/v70n4/v70n4p49.html

2. “What are the major federal safety net programs in the U.S.?” Center For Poverty & Inequality Research. https://poverty.ucdavis.edu/article/war-poverty-and-todays-safety-net-0

3. “TAXPAYER RELIEF ACT OF 1997”. https://www.govinfo.gov/content/pkg/PLAW-105publ34/pdf/PLAW-105publ34.pdf

4. “Public law 115-97 — DEC. 22, 2017”. https://www.govinfo.gov/content/pkg/PLAW-115publ97/pdf/PLAW-115publ97.pdf

5. “NEW EVIDENCE ON THE LONG-TERM IMPACTS OF TAX CREDITS”. Chetty, Friedman, and Rockoff. November, 2011. https://www.irs.gov/pub/irs-soi/11rpchettyfriedmanrockoff.pdf

6. “Policy Basics: Where Do Our Federal Tax Dollars Go?” Center on Budget and Policy Priorities. April, 2020. https://www.cbpp.org/research/federal-budget/where-do-our-federal-tax-dollars-go

7. “Economic Security Programs Cut Poverty Nearly in Half Over Last 50 Years”. Trisi, Saenz. Center on Budget and Policy Priorities. November, 2019. https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-cut-poverty-nearly-in-half-over-last-50