The $1.9 trillion COVID-19 relief measure has a lot in it that directly and indirectly addresses the impact of this year-long pandemic. It includes several issues that have received increased focus because of this past year’s struggles (for example, the racial and regional inequities within the economy and health care system). There are limited added funds specific to “child welfare” because the December COVID-19 bill did include $350 million for the Title IV-E Chafee program, $50 million in training and education vouchers, an increased match for Family First Prevention Services, $75 million in Promoting Safe and Stable Families funding, $10 million for the Court Improvement Program (CIP), greater access to funding for kinship navigator programs, and mandated protections for youth aging out of foster care. But while there are few targeted funds for child welfare, there is a tremendous amount of funding that will influence these families throughout the child welfare continuum from primary prevention to youth exiting foster care. What is in it:
One area specific to child welfare that did get funding was the Child Abuse Prevention and Treatment Act (CAPTA). Title I state grants under CAPTA receives $100 million more on top of the current FY $90 million while Title II, the Community-Based Child Abuse Prevention (CB-CAP) grants receive $250 million on top of the current FY $60 million. The funds can carry through federal fiscal year 2023 (until October 1, 2023).
CAPTA state grant funds, which were at $25 million until 2017, can be spent flexibly from encouraging community-based prevention, collaboration with CPS and other agencies, workforce development, technology enhancements, training, and promoting access to services. For decades funding has been too slim to be able to impact any of these areas significantly. CB-CAP funds flow through a governor’s designated agency/entity so that funds can go into community-based efforts that attempt to address primary prevention of child abuse and neglect. Like CAPTA state grants funding has been frozen at $39 million for many years.
These new funds do not have to meet a match.
Direct payments (tax rebate checks) of $1400 per person, including dependents. The $1400 builds on the $600 from December to fulfill a $2000 per person promise. This $1400 will completely phase-out for a single person making $80,000 and couples making $160,000. The IRS is likely to follow earlier rebate distribution strategies. That means direct deposit if the IRS has your account information or in other cases, either mailed checks or debit cards. For child welfare, foster parents will be eligible if they claimed a child in foster care in the tax year the rebate is based on. The same would be true of relative caregivers. For youth who have exited foster care, they will be eligible if they are not claimed on someone’s tax filing. If that status changed in 2020, then it would be wise to file the 2020 tax filing very soon. There could be a portal for filing adjusted claims, but that will be dependent on IRS guidance. Child welfare agencies will want to be aware of these opportunities to help these families.
Some missed out last year because of changing family circumstances. There were also reports that some people threw away debit cards, not recognizing the envelope and losing their rebate as a result.
The Child Tax Credit. A significant change has been made to the CTC for at least 2021. Parents with a child under age 6 will be eligible for a $3600 tax credit. It is refundable, meaning low-income families will receive the full benefit. For children aged 6 through 17, the credit will be $3000. The addition of 17-year-olds is new. The credit is for each child. It is hoped that these credits will be issued monthly ($300 or $250 per month) starting in July. This will be dependent on the IRS’s ability to make the tax system function in this way.
It will start in July with the second half of the credit claimed on people’s tax filing next year. The credits begin to phase out at $112,000 per individual and $150,000 per couple. For these couples, it stays at $2000 until that $2000 phases out, starting at $200,000 for individuals and $400,000 per couple. For child welfare, the same tax status applies. That is, if you claimed a child (a relative including a foster child or adopted child) as a dependent, you would earn that credit. It is not clear how such adjustments will be made for families that experience a dramatic change in income up or down. It is also unclear how adjustments will be made when a child’s placement changes (i.e., who receives the credit if a child enters foster care or relative care).
Other tax changes including the Child and Dependent Care Tax Credit (CDCTC) and the Earned Income Tax Credit (EITC). The CDCTC helps to offset the cost of child care and dependent care for adults. It is increased from a maximum of $200 to temporarily $3000 (with an increase of $3600 for a child under age 6). It is for actual child care costs or dependent care costs. The EITC is expanded for childless adults. The benefit will be raised from the current maximum of roughly $530 to $1500. The age range for the benefit is expanded. It is currently limited to adults 24 to age 65. This would be decreased to non-students from ages 19 through 24 (homeless and former foster youth are covered even if they are students). The benefit is for tax year 2021, which means the refund would come with next year’s tax filing. For child welfare, this would be a benefit for youth aging out of foster care, homeless youth, and for those former foster youth and homeless youth in college.
Child care funding increases. The package provides over $39 billion in child care funding delivered in two parts. $14 billion is for the Child Care and Development Block Grant (CCDBG), which draws $8.9 billion for FY 2021. The second part is for $25 billion and is for stabilization fund. States will have to obligate the news funds by the end of this year but have two more years to spend the obligated funds. The second large share for stabilization funds will be awarded to states that have to provide a plan. It can be more broadly used than the $14 billion. Local programs (through their state) can use funds for personnel expenses, rent and mortgage payments, personal protective equipment, mental health services for children and staff, and other services necessary to maintain or resume operations of the child care provider.
States may reserve up to 10 percent of grant funds for supply building, administrative, and technical assistance costs. For child welfare, expanded or restored access to child care is an important part of primary prevention as low-income families get expanded access to quality child care.
$350 billion would be split for state and local relief. States and the District of Columbia will split $195 billion. Cities, towns, and counties would get $120 billion, Tribal governments receive $20 billion, and $10 billion is set aside for infrastructure projects. Funding can be used beyond last spring’s relief which narrowed state relief to the direct costs of COVID-19. These funds can be used for lost revenue but cannot be used to pass along state tax cuts or for direct deposit into pension funds. Funds are available until December 2024. The local funds are awarded by formula to three local government categories: metropolitan cities, non-entitlement units of local government, and counties. $45 billion for cities, $19.5 billion for non-entitlement units of local government, and $65 billion to county governments. Funding is to start going out in 60 days. For child welfare, what is in it is a great deal. The additional state and local funds should prevent pending and future budget cuts that would harm many agencies and non-profits providing child welfare services. It should also help address at least some hesitancy in moving forward with the Family First Prevention Services since a key to ramping up or starting these new services is whether a state or local government can sustain such prevention funding beyond the initial year or two.
Other smaller pieces of the act have a direct impact on child welfare. There is an additional $1 billion for TANF. In 2019 states spent more of their TANF dollars $1.8 billion on Title IV-B services directly coming from the TANF block grant. That is significantly more than the $615 million provided through Title IV-B parts 1 & 2. The Individuals with Disabilities Education Act (IDEA) received significant increases, including $250 million for infants and toddlers, Part C. For child welfare, CAPTA has a requirement that families with children three and younger be referred to these infant and toddler prevention services. There is also a one-time mandatory appropriation of $1.0 billion for the Head Start program in FY2021. The MIECHV, home visiting program received a temporary $150 million in addition to the annual $400 million. There is also an additional $20 million for suicide prevention programs targeted to youth.
(Part 2 next week)