Mar 6, 2014 | PERMALINK »
President Proposes Expanding and Strengthening EITC To Youth and Childless Adults
By Helly Lee
On Tuesday, President Obama released his FY 2015 budget, which includes a proposal to expand and strengthen the Earned Income Tax Credit (EITC) for low-income childless workers, including non-custodial parents.
EITC is one of the country’s most important anti-poverty programs. In 2012, it benefited over 27 million Americans, lifting 6.6 million people (including 3.3 million children) out of poverty. The program has long been known to encourage work among low-income people because one must be employed to be eligible for the credit. However, individuals without dependent children are only eligible for a very small credit—a maximum of about $500—and begin to lose the benefit even before their earnings reach the poverty threshold.
In his budget, President Obama proposes doubling the maximum credit for childless workers to about $1,000 and increasing the income limit to qualify for the credit from less than $15,000 to $18,000. In addition, the President proposes to make the EITC available for young workers age 21 and over and older workers up to age 67, consistent with the rising Social Security full retirement age. The current age limits are 25 to 65. The proposed changes would have a significant impact on low-income workers who do not currently have access to the EITC.
Young adults, especially those with limited education and skills, continue to face employment challenges in our still recovering economy. They disproportionately work in low-wage jobs without a career path and are among the millions of the working poor. This proposal is significant because those newly eligible would include 3.3 million working young adults ages 21 to 24. Full-time students who can be claimed as tax dependents would not qualify for the EITC.
Research has shown the lasting benefits of the EITC, notably that it promotes work and raises the income of low-wage workers. This proposal to expand and strengthen the program is critical to helping low-wage workers address major financial challenges.
The President’s budget also proposes to make the 2009 American Recovery and Reinvestment Act (ARRA) improvements to the EITC and the Child Tax Credit (CTC) permanent. ARRA expanded the EITC for families with three or more children. These larger families can now receive up to $672 more than they would have without this change. It also expanded marriage penalty relief in the EITC, allowing married couples to receive larger benefits at modestly higher income levels. These two improvements lifted an estimated 600,000 out of poverty and reduced the severity of poverty for approximately 10 million people in 2012. Under ARRA, the CTC was also expanded, reaching more low income working families and increasing the credit amount for current recipients. This change lifted 900,000 people out of poverty in 2012. These improvements to both the EITC and CTC are set to expire in 2017 unless Congress makes them permanent.
The EITC has long received bipartisan support because it is recognized as a program that successfully encourages and rewards work. As debates around tax reform continue, CLASP will remain steadfast in our support for strengthening these critical tax credits for low-income families.
Feb 28, 2014 | PERMALINK »
Community Eligibility: Setting a Place for All at the School Lunch Table
There is a strong link between adequate nutrition and education. When children have enough to eat, they are more attentive in class, have better attendance, and fewer disciplinary problems. Furthermore, good nutrition improves quality of life and leads to strong long-term health, education, and economic outcomes. For low-income children, school meals are a key contributor to good nutrition. Unfortunately, not all children who qualify for free breakfast or lunch receive it.
On Tuesday, the Department of Agriculture announced plans to expand Community Eligibility, a pilot program that allows schools to provide free breakfast and lunch to all students in high-poverty schools. The program was created in 2010 by the bipartisan Healthy, Hunger-Free Kids Act. Under the law, if at least 40 percent of the students in a given school are known to qualify for free or reduced-price meals based on electronic matches with other programs that serve low-income families, (such as SNAP, TANF, or foster care services), then all students in that school are ruled eligible for free school meals. The USDA will reimburse schools for a share of all meals served based on the percentage of students who are identified as low-income by these automated matches.
Currently, Community Eligibility has been phased into 11 states. During the 2012-2013 school year, about 2,000 schools participated in the program, serving nearly 1 million children. With the expansion of Community Eligibility this July, more than 22,000 schools nationwide will be eligible to serve free breakfast and lunch to all their students—reaching nearly 9 million children.
Communities that currently participate in Community Eligibility have reacted positively. The program decreases the stigma experienced by children receiving free or reduced-price meals. Furthermore, it eases the administrative burden on schools, both in determining eligibility and in providing service. And most importantly, it ensures paperwork won't prevent needy kids from getting food, especially when parents lose jobs or otherwise fall on hard times.
The expansion of Community Eligibility will give millions of low-income children the free nutritious meals they need to ensure positive health, education, and economic outcomes now and in the future.
To learn more about Community Eligibility and the opportunities it presents, visit FRAC’s Community Eligibility resource page.
To learn more about other ways federal and state governments can streamline eligibility determination to create modernized benefit systems that minimize the burden on both recipients and agencies, read Moving to 21st Century Public Benefits.
Feb 6, 2014 | PERMALINK »
Helping Unemployed Workers Access Benefits: A Q&A between Elizabeth Lower-Basch and Rachel Meeks Cahill
Since federal benefits for long-term jobless workers expired on December 28, nearly 1.7 million workers have lost unemployment insurance (UI) benefits. This afternoon, the Senate again failed to overcome a filibuster preventing action on a bill to extend federal UI. Many long-term unemployed workers and their families are facing significant hardships as a result, including having difficulty paying for food or rent. To understand what this means on the ground – and to learn about one strategy for helping such workers – I spoke with Rachel Meeks Cahill, Director of Policy at Benefits Data Trust (BDT), a national non-profit organization committed to transforming how individuals in need access public benefits. Since 2010, BDT has worked in partnership with Pennsylvania’s Departments of Public Welfare and Labor & Industry to conduct targeted outreach to individuals who have exhausted or been denied UI benefits.
1) So, what is it that you do?
BDT has long-standing partnerships with Pennsylvania state agencies to use a data-driven approach to identify and provide application assistance to vulnerable Pennsylvanians who are eligible, but not enrolled in various benefit programs, including the Supplemental Nutrition Assistance Program (SNAP), Low-Income Home Energy Assistance Program (LIHEAP), Medicaid, Medicare Savings Program (MSP), and more. Since 2005, BDT has submitted nearly 355,000 benefit applications on behalf of people in need, resulting in approximately $1 billion in benefits delivered to low-income seniors and families.
In late 2010, BDT launched its Unemployment Compensation (UC) project in partnership with the Pennsylvania Department of Public Welfare (DPW) and Department of Labor and Industry (L&I). Through data-sharing agreements with each agency, BDT identifies individuals across the state who recently exhausted or were denied unemployment benefits and are not currently enrolled in SNAP. BDT reaches out to eligible individuals via direct mail and phone calls to educate them about SNAP benefits and help them apply. Many have never accessed public benefits before and find the application processes difficult and time-consuming. BDT’s highly trained staff provides in-depth application support and comprehensive follow up to ensure applications are as complete as possible when submitted to the SNAP agency.
BDT receives regular updates to the UC file as new individuals exhaust their benefits. This allows BDT to respond quickly to shifts in the labor market and policy changes in Washington.
2) What impact does this outreach have?
The UC project’s data-driven outreach model is designed to operate at scale. In its first three years in operation, the project has contacted 253,000 households and screened 48,000 for potential eligibility, resulting in the submission of over 17,000 SNAP applications. Almost half of all applicants appear to qualify for expedited SNAP benefits, indicating they have virtually no income or resources remaining by the time they apply. Those approved receive an average benefit of $193 per month.
One participant, Ms. A, age 58, explained what the outreach meant to her –
“In the past three weeks, I’ve gone through three failed job interviews and I felt like a failure. None of us understand how we got into this predicament. Thank goodness you’re doing this…This benefit amount is equivalent to my monthly mortgage payment…I’m so glad you didn’t let me drop through the cracks.”