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Keep Survivors Out of Poverty with Working Family Credits

December 4, 2015

Congress has the opportunity to make permanent key provisions to both the Earned Income Tax Credit (EITC) and refundable Child Tax Credit (CTC). As part of this opportunity, Congress can also close the EITC gap for childless workers before these provisions expire in 2017. These programs are critical to combatting the economic insecurity that too often constrains the ability of domestic violence victims to escape abusers.

The EITC is a federal tax credit for low- and moderate-income working individuals. It encourages and rewards work as well as offsets federal payroll and income taxes. Twenty-six states, plus the District of Columbia, have established their own EITCs to supplement the federal credit. [1] The CTC helps working families offset the cost of raising children. It is worth up to $1,000 per eligible child (under age 17 at the end of the tax year).

The EITC and CTC are among the nation’s strongest tools to reduce poverty. In 2013, these credits were successful in lifting 9.4 million people out of poverty, making the EITC and CTC more effective than any other single program. [2] Allowing these crucial, pro-work tax credits to expire would push more than 50 million Americans, including 25 million children, deeper into preventable poverty. This would be particularly harmful to those subject to domestic violence. Although intimate partner violence is damaging to all socioeconomic groups, women living in poverty experience this violence at an increased rate. [3] Abusers can leverage economic insecurity against victims to create financial dependency that hinders their ability to escape.

“Many victims of domestic violence fall into poverty when they flee their abusers. During the relationship and after a victim has fled, an abuser systematically engages in financial abuse, trapping the victim and her children in a cycle of poverty,” explained Cindy Southworth, Executive Vice President of the National Network to End Domestic Violence (NNEDV).

Survivors who choose to leave their abusers, despite these economic barriers, often face financial hardships as they attempt to rebuild their lives. For example, the inability to access affordable housing forces survivors and their children onto the streets where they may remain homeless. [4] Economic programs like the EITC and CTC can sustain the long-term security of those fleeing domestic violence. A local program shared this story of a survivor who used the EITC to achieve economic stability:

When Susanna implemented a plan to keep herself and her children safe from her abuser, she incurred debt for an emergency stay in a hotel and basic living expenses after being cut off from a joint account. At tax-time Susanna accessed a local Volunteer Income Tax Assistance (VITA) site, where a trained volunteer told her that because she worked in 2013 and had two young children, she was eligible for the Earned Income Tax Credit. The EITC allowed her to pay off the $700 of debt she had on a high interest credit card, start an emergency savings account, and enroll in an Individual Development Account Program. The EITC provided an opportunity for this family to create safety, stability, and most importantly, a pathway out of poverty.

Senators and Representatives cannot afford to forget their responsibility to working families and survivors of domestic violence like Susanna. Millions of lives are dependent on their decision to make these key EITC and CTC provisions permanent.

[1] Policy Basics: the Earned Income Tax Credit, available at http://www.cbpp.org/research/federal-tax/policy-basics-the-earned-income-tax-credit

[2] http://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens

[3] Breiding, M.J., Chen J., & Black, M.C. (2014). Intimate Partner Violence in the United States — 2010. Atlanta, GA: National Center for Injury Prevention and Control, Centers for Disease Control and Prevention.

[4] Browne & S. Bassuk, Intimate Violence in the Lives of Homeless and Poor Housed Women, American Journal Orthopsychiatry, 67(2) 261-278 (April 1997)