State & Local Government Policy, Business and Technology

Getting Public Benefits to the People Who Need Them

Governing: California's new budget expanded the state's Earned Income Tax Credit (EITC), providing access to the benefit for an estimated 1 million more low-income residents. Other states are looking at creating state EITCs or expanding existing ones. The results of a recent experiment can guide governments looking for ways to better reach eligible individuals and encourage them to take up this benefit and other forms of aid for which they are eligible.

The federal EITC, conceived as an incentive for low-income Americans to work, has been around for more than 40 years. But as with other public-benefit programs at all levels of government, it suffers from notoriously low take-up rates. Nearly a quarter of those eligible for the federal EITC fail to claim their benefits, which amount to 33 days of extra income on average per recipient. This means that approximately 7 million individuals are losing out on an average of about $1,100 each. This missed benefit could make a real difference to the low-income Americans eligible for the EITC, who on average earn about $14,000 a year.

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