Home Credit score 19% of families can no longer afford housing with the end of monthly child tax credit payments

19% of families can no longer afford housing with the end of monthly child tax credit payments

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Many families struggle financially without these monthly payments.


Key points

  • The enhanced Child Tax Credit has not extended to 2022 so far.
  • Without these monthly payments, many families struggle to pay essential bills.

The enhanced child tax credit has done wonders for the finances of many families in 2021. Not only has the value of the credit increased over the past year, but part of it has been paid out in monthly installments that have touched recipients’ bank accounts between July and December.

Lawmakers initially hoped to keep the improved Child Tax Credit in place for 2022. This would give recipients access to higher pay with the monthly payments they had been counting on.

But as of now, the enhanced child tax credit is banned for 2022. That’s because it was included in President Biden’s Build Back Better bill, which is currently stalled in the Senate and is not expected to not advance.

If withdrawing those monthly child tax credit payments at a time of skyrocketing inflation sounds like a recipe for disaster, well, it is. A recent survey of Action ParentsEnsemble highlights how some families suffer because they do not receive this money each month.

Many families can’t make ends meet

The loss of their monthly Child Tax Credit payments has resulted in delayed bill payments for many families. A good 57% of respondents say that without these payments, it has been more difficult to meet their basic needs. And 19% say they can no longer pay their rent or mortgage payments without the extra money.

This is hugely problematic, because while there were protections in place earlier in the pandemic to help those with housing issues, these have largely expired. For renters, the federal ban on evictions expired in mid-2021. Some states have extended their own deportation bans, but at this point much of that protection has also expired.

Meanwhile, at the start of the pandemic, homeowners who couldn’t meet their mortgage payments were allowed to suspend payments via forbearance for up to 18 months. But for those who signed up at the start of the pandemic, that protection is long gone.

There are still rental assistance funds available in some parts of the country for those who cannot pay their landlords. But to be eligible, applicants generally need to show that they have suffered a loss of income or specific hardship related to the pandemic. Not receiving a monthly windfall at a time when the cost of living is rising may not be considered a valid reason to seek assistance. Additionally, many cities and states are suspending the distribution of rent relief due to limited funds and a deluge of applications to sort through.

What to do if you can’t meet your housing costs

If you’re struggling to pay your housing costs and moving isn’t an option (or an affordable option, anyway), you may still have a few strategies to explore. If you are a tenant, talk to your landlord and ask for a temporary reduction in your rent until your financial situation improves. If you are able to pay part of your rent, your landlord can agree to an arrangement as long as they receive a certain amount of money.

In the meantime, if you are a homeowner, you can ask to modify your mortgage to make it more affordable. Refinancing your mortgage could also result in lower monthly payments, but with mortgage rates rising, loan modification may be your best bet, especially if you don’t have the best credit rating.

Unfortunately, the loss of monthly child tax credit payments has been a blow to many families. Until the cost of living starts to drop, many people may continue to struggle unless lawmakers can pull themselves together and come up with a workable solution.

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