In 2021, we were proud to launch GetCTC to help eligible families with low or no incomes claim the expanded Child Tax Credit (CTC) and stimulus payments—giving them the flexible cash they needed for economic stability during the pandemic. The simplified tax filing tool makes it easier for individuals and families to submit tax returns and claim the benefits they’re entitled to. In 2021, GetCTC helped 115,000 households claim $440 million in child tax credit and stimulus payments. Our hope is to drive that impact even further in 2022.
And yet, as of December 2021, an estimated four million children and their families had not received their CTC. We wanted to know why—and we found that some messages around the CTC weren’t delivered as clearly as they could have been.
Many campaigns designed to encourage people to claim the CTC did so by telling families they could receive up to $3,600 a year per child. The implicit assumption here was that highlighting the total yearly CTC amount ($3,600) vs. the monthly amount ($300) would increase people’s interest in claiming this benefit.
But $3,600 might be hard to conceptualize if your budget isn’t based on yearly numbers—and for most people, it isn’t. In fact, based on a study we conducted among people who receive government benefits, less than 1% budget on yearly basis. The vast majority of people who use a budget—over 85%—report budgeting on a weekly or monthly basis.
So we wanted to know: Could talking about benefits on the same scale as people think about budgets increase interest in claiming benefits?
To find out, we ran large scale field experiments amongst individuals with low incomes. During these, we compared the efficacy of describing CTC amounts in weekly, monthly, and yearly terms ($69 a week, $300 a month, $3,600 a year).
When the amount of the CTC was communicated in terms that matched how people were already thinking about their budgets (on a weekly or monthly basis), between 16-26% more people showed interest.
Reflecting these learnings, we recommend that outreach for programs like CTC or the Earned Income Tax Credit (EITC) describe benefits in monthly rather than yearly terms. In short, we need to communicate with people in terms that easily map onto their existing financial lives. This may help people simplify, plan, and effectively manage their resources.
Want to learn more? Find the full copy of this research, “Communicating amounts in terms of commonly used budgeting periods increases intentions to claim government benefits,” published in the Proceedings of the National Academy of Sciences.