Abstract: More Money, Less Problems: Impact of the EITC Periodic Payments on Health and Well-Being (Society for Social Work and Research 20th Annual Conference - Grand Challenges for Social Work: Setting a Research Agenda for the Future)

Schedule:

Friday, January 15, 2016: 8:30 AM

Meeting Room Level-Meeting Room 8 (Renaissance Washington, DC Downtown Hotel)

* noted as presenting author

Dylan Bellisle, MSW, Doctoral Student, University of Chicago, Forest Park, IL

Ruby Mendenhall, PhD, Associate Professor, University of Illinois at Urbana-Champaign, Urbana, IL

Renee Lemons, MEd, Doctoral Student, University of Illinois at Urbana-Champaign, Urbana, IL

Background: The Earned Income Tax Credit is a refundable tax credit that low to moderate working individuals and families can claim on their tax return. The credit is particularly beneficial to taxpayers who claim children, with a maximum benefit of $6,143 for three children for the 2014 tax year. While promoted as one of the largest and most effective anti-poverty programs, its nature as a tax credit means that families can only benefit from it once a year when they file a tax return. This paper discusses findings from a 2014 EITC Periodic Payment Pilot study that provided four periodic payments to 343 EITC families in advance of them actually claiming the credit. The pilot study also followed 165 families who did not receive the periodic payments. This paper examines the relationship between receiving the periodic payment and self-reported mental health. It also explores the relationship between well-being and families’ ability to secure enough money to pay for a financial emergency that cost about $1,000.

Methods: To explore the relationships between (1) periodic EITC payments and reported mental health and (2) the propensity to plan for an emergency that costs $1,000 and reported well-being, this paper will use a mixed methods approach utilizing quantitative data from four waves of surveys, and qualitative data from interviews and focus groups with study participants. Collection of the original primary data continues through the middle of May 2015, and the final report and data is expected to be made available by the middle of June 2015. It is expected that the analysis for the present paper will occur in August and September 2015 to have the final paper available for the conference.

Results: Preliminary findings show that receiving the periodic EITC payments help families to pay bills and rent on time and even save. Families receiving the periodic EITC payment have reported a sense of mental relief from the chronic stress of poverty. In at least one case, it prevented a family from needing to move to a new residence, as is often the case for many low-income families. Additional analysis is ongoing and will be presented at the conference.

Implications: Research has shown the benefits of having a plan to cover unexpected emergency expenses. Findings may provide support for an alternative method of disbursement of the EITC, especially for those who plan for emergency expenses. Future studies could examine this effect over a longer period of time to see if the impact is lasting, as well as see if those without savings and access to emergency money do save over time.