What’s in the American Rescue Plan for LGBTQ Folks & Families?

After weeks of deliberations and delays on COVID-19 relief, the House and Senate voted to send the American Rescue Plan to President Biden’s desk. The most popularly known provisions of the legislation authorized economic relief checks of up to $1400 for individuals with additional payments for dependents and children. The bill also includes other significant changes to critical programs that significantly benefit the LGBTQ community, women, and communities of color. 

During the pandemic, over half of LGBTQ households reported job loss (56%)–more often than cishet households (44%). The Movement Advancement Project found two-thirds (66%) of LGBTQ households had one or more serious financial problems since March 2020, 1.5x more often than non-LGBTQ households. HRC reports that LGBTQ people were also more likely to request a rental delay or cut their budgets to get by during COVID-10. Compared to their straight peers, LGBTQ individuals were more likely to seek assistance from public programs and federal benefits such as Supplemental Nutrition Assistance Program (SNAP), aka “food stamps.” One in four LGBTQ households used SNAP to afford food during 2020, as compared to only one in ten households overall (13%). 

The American Rescue Plan Act (ARPA) boosts benefits and public programs and targets that help low-income and houseless people who need the most assistance to recover from the pandemic. By expanding access to beneficial tax credits and providing rent relief, among other provisions, the ARPA is a lifeline for the many vulnerable communities in the United States, including LGBTQ communities, that are in dire need of assistance. 

LGBTQ Poverty & Tax Credits

The American Rescue Plan Act expands access to important income tax credits for vulnerable communities. The Earned Income Tax Credit (EITC) is a tax refund that targets low-income households, especially those with children, disproportionately benefiting LGBTQ households who live in poverty more often. The HRC reported in 2020 that 1 in 5 LGBTQ people live in poverty. For transgender folks, LGBTQ women, and LGBTQ people of color, poverty rates are even higher: bisexual women and transgender individuals have poverty rates of 29.4%. Black LGBTQ individuals have poverty rates of 30.8%. 

The Act also expands EITC eligibility to workers younger than 25 and older than 65, which will have a big effect on younger people who identify as LGBTQ more frequently. A 2021 Gallup poll reported that 1 in 6 adults in Generation Z identified as LGBTQ, with self-identification as LGBTQ highest among younger age cohorts. Expanded EITC eligibility gives a boost to younger LGBTQ individuals that may be struggling with student loan debt, unemployment, or housing issues. The law also ensures that individuals with reduced earnings don’t see a reduction in tax benefits. For LGBTQ individuals – who face higher rates of youth poverty and were disproportionately affected by the pandemic – EITC expansion will ensure that LGBTQ workers affected by the pandemic don’t fall further behind. According to the Movement Advancement Project (MAP), nearly two-thirds (64%) of LGBTQ households faced job or wage disruption during the pandemic, compared to 45% of straight households. 

Disproportionately impoverished LGBTQ families will also benefit from the ARPA. LGBTQ households with children or dependents also struggle against poverty more often than non-LGBTQ peers. Nearly 1 in 5 children in LGBTQ households lives in poverty, compared to 1 in 7 of cis/het households–which increases to 1 in 3 children for Black or Latinx LGBTQ households. In accessing resources for their families, Movement Advancement Project found that LGBTQ families of color also face the most significant barriers to accessing health insurance and safety nets. 

Both Child Tax Credit (CTC) and the Child and Dependent Care Tax Credit (CDCTC) that help parents with young children and adults caring for dependents are expanded under the Act. The CTC and CDCTC are now fully refundable and have higher benefit amounts. The credits are also paid in installments instead of a lump sum during tax season, ensuring that families won’t have to wait for assistance. Same-sex households, 31% of which have children, will now better care for their families. 

Housing & Health for LGBTQ Households

ARPA marshals federal resources to provide $21.5 billion in rental assistance and $10 billion in mortgage assistance to households in need. ARPA also targets low-income households experiencing homelessness or that are at risk of losing their homes with an additional $5 billion in emergency vouchers. The Act also provides direct loan assistance to borrowers struggling to maintain their payments and afford their housing. 

Critically, rental and mortgage assistance for households will help keep low-income LGBTQ people in their homes and off the streets. Today, LGBTQ communities continue to face discrimination from landlords, at shelters, and in assisted living centers that can make finding housing difficult at the best of times–let alone during a pandemic. LGBTQ people, especially transgender folks, are more likely to report difficulty finding housing and navigating the housing market. Housing discrimination, coupled with poverty, drives higher rates of houselessness for LGBTQ people, particularly LGBTQ youth. According to the Williams Institute, between 20% and 45% of LGBTQ youth are homeless. 

ARPA also expands access to healthcare for low-income and vulnerable communities–which will help reduce the steep barriers LGBTQ people face in accessing healthcare. More than one in ten LGBTQ people reported losing their health insurance since the start of the pandemic (13%), 2x more often than for non-LGBTQ people (6%). Access to healthcare for people of color in the LGBTQ community during the pandemic has been particularly hard. Over half of Black LGBTQ individuals reported they could not access healthcare or had to delay medical care since March 2020 (54%).

The Act will provide $7.6 billion for community health centers, many of which provide needed healthcare services to low-income LGBTQ people. Community health centers are crucial for low-income LGBTQ individuals and other vulnerable communities without insurance to access care. The Act also expands subsidies for those purchasing health insurance through the Affordable Care Act (ACA) exchanges, which are prohibited from discriminating based on sexual orientation or gender identity. These provisions of the Act will help get low-income communities coverage they can use to get needed care.

Making the Next Steps Equitable

The Center for LGBTQ Economic Advancement & Research celebrates the passing of the American Rescue Plan Act of 2021 as a measure that will help lift individuals out of poverty, provide a safety net for families, and reduce homelessness for LGBTQ communities. President Biden’s landmark piece of legislation has received widespread support from most of the country: 85% of Americans support the bill’s tax credit expansion, with majorities from both parties supporting direct funding to state and local governments.

However, it is imperative that this funding reaches those communities that need it most, and to ensure these programs will effectively address systemic inequities instead of exacerbating them. To make sure that funding reaches those vulnerable LGBTQ individuals and communities that need it, Congress and the Biden Administration still must implement the law equitably by:

• Working with the Small Business Association, the National LGBTQ Chamber of Commerce, and community organizations to ensure allocation of funds from the Act reach LGBTQ-owned and operated businesses and community services nationwide.
• Working with LGBTQ health nonprofits to make sure health centers and volunteer health groups that equitably serve LGBTQ communities have access to funding to provide needed services.
• Explicitly committing that funding will be distributed fairly to under-served LGBTQ communities and used to help eliminate the discriminatory gaps in healthcare, employment, housing, education that LGBTQ people are facing today.
• Expanding data collection on LGBTQ communities in public data collections, particularly COVID-19 monitoring and relief programs, to improve policy measures and ensure program efficacy.

It is clear that “building back better” will take much more work. In addition to enacting and implementing American Rescue Plan for maximum impact, the government will have to take additional steps to ensure that low-income LGBTQ individuals and other vulnerable communities can recover quickly–such as investing in the care economy, raising the minimum wage, and eliminating student debt. CLEAR looks forward to supporting future measures that invest in LGBTQ communities and help close the wealth gap for LGBTQ people in the United States.