Social Security payments have become an increasingly relevant income support for children

Children are increasingly living with adults old enough to receive retiree Social Security payments. We show that Social Security has become an increasingly important income support for children. With the Social Security trust fund projected to be exhausted by 2034, now is the time to start thinking about the role the program plays in keeping children out of poverty.

The share of children living with an adult aged 62 and over—the earliest age at which an individual is eligible to receive retiree Social Security payments—has nearly doubled since the year 2000. Figure 1 illustrates this increase, showing that the percentage climbed from 5.3% in 2000 to 10.5% in 2023.

The increase in children living in households with someone 62 and over was accompanied by a rise in children living in households with Social Security income. In 2023, 9.1% of children under 18 were living in a household with someone receiving Social Security payments, as compared to 6.9% in 2000. (Figure 2). The increase in children’s exposure to Social Security income over the past two decades is especially relevant due to the declining availability of traditional cash assistance through the Temporary Assistance for Needy Families (TANF) program. By 2023, twice as many children were living in households reporting Social Security income as in households reporting TANF income.¹ Moreover, in 2023, the share of children living in households receiving Social Security was somewhat higher than the share living in households that received either TANF or Supplemental Security Income (SSI), a cash program for low-income disabled and older people.

Social Security income includes old age retirement, disability, and/or survivor’s income. But it is Social Security for households with older adults, rather than the disability portion of the program, that is driving these changes over time, as Figure 3 shows. In 2000, 3.6% of children were living in a household with Social Security but no adult 62 or older. By 2023 that number had fallen to 2.5%. By contrast, the share of children who lived in Social Security households containing an older adult doubled—6.6% by 2023 compared to 3.3% in 2000.

To understand how Social Security exposure has changed over time within different living arrangements, we divide children’s households into those with and without someone aged 62 and older. Figure 4 shows that among children in households with no member aged 62 and older, the share with any Social Security income declined from 3.7% to 2.6% over the period.

For households that do include an older adult, we separate those with a grandparent caregiver and those without. A grandparent caregiver is a grandparent of a child under 18 in the home who is responsible for the child’s basic needs. For children living in a household with an older adult and grandparent caregiver, the rate of children’s households with Social Security income reached around 76% in 2006 and declined since then to just under 70%. For households with an older adult but no grandparent caregiver, the rate also fell slightly between 2006 and today to 63%. These patterns indicate that rising Social Security exposure is a natural consequence of the changing living arrangements of children—that is, the fact that they are more likely to live with older adults—rather than of an explicit change in policy.

As a broad-based social insurance program for the elderly, Social Security is not designed to target resources towards children in poverty. Indeed, as shown in Figure 5, though Social Security exposure is elevated for children living at or just below the poverty line, children throughout the income distribution are in Social Security households. Some very low-income families may not have access to the program because of insufficient work history.

By contrast TANF’s purpose is to support children in families with low incomes. Figure 5 shows a clear income gradient in TANF receipt as expected, though some very low-income families do not receive TANF due to work requirements or restrictions related to immigration status.

Nevertheless, by 2023, children in poverty were more likely to live in a Social Security household than in a TANF household. As shown in Figure 6, 12.8% of poor children live in a Social Security household compared to 10.0% who live in a TANF household. This represents a sharp change from 2000, when the share of poor children living in a TANF household was more than two and a half times the share living in a Social Security household. Between 2000 and 2023, the share of poor children living in a TANF household plunged from 24.3% to 10.0%, while the share living in a Social Security household climbed from 9.5% to 12.8%.

Differences by Race and Ethnicity

Living arrangements tend to differ by race and ethnicity. Figure 7 shows the fraction of children living with a household member age 62 and older has been increasing since 2000 for all major race/ethnicity groups. Asian children are much more likely to live with an older adult in the household, whereas white children are the least likely to do so. Black and Hispanic children are particularly likely to live with a grandparent, but their grandparents are more often younger than age 62 compared to grandparents of Asian children.

Similarly, Social Security exposure differs by race and ethnicity, and has been increasing for children of all race/ethnicity groups since 2000. Social Security is often an important source of income in retirement for people of color and individuals who are less likely to have private retirement savings and pensions. As shown in Figure 8, over the past two decades, Black children have been more likely than other children to live in a household with a member receiving Social Security income. In 2023, 13.1% of Black children lived in a household receiving Social Security income, compared to 8.0% of White, 8.6% of Hispanic, and 9.9% of Asian children.

Even in 2023, the fraction of the total income Social Security makes up in a children’s households remains small. Most children do not live in households with such income, and it is often not the primary income source for recipient households. Figure 9 shows that less than 3% of the total income in children’s households comes from Social Security income. Nevertheless, there are some subpopulations with much larger numbers: households with an adult aged 62 and over, and those with a grandparent caregiver aged 62 and over have substantial portions of their income coming from Social Security income.

Recent work investigates the impact of Social Security on overall resources in the homes of children living with grandparents, examining households in which the oldest member is slightly younger or older than age 62. That analysis suggests that Social Security eligibility does not raise household income because claiming typically occurs at the same time as retirement or a move to part-time work. However, Social Security eligibility does reduce the probability that a child lives in deep poverty and likely frees up adult time in the household for childcare or other investments in children.

Though not traditionally seen as an income support program, Social Security is playing an increasingly important role in the economic lives of children. Today, more poor children live in households reporting Social Security income than TANF income. The combination of changing child living arrangements, on one hand, and the decline of traditional cash assistance, on the other, requires a broader perspective on Social Security.  

With the Social Security trust fund projected to be exhausted by 2034, now is the time to start thinking about the role the program plays in supporting low-income children. Within a decade, policymakers will be forced to make hard trade-offs to sustain one of America’s most popular social programs. We recently issued one proposed blueprint, which reflects a combination of tax increases, benefit cuts, and expanded immigration; it has received robust bipartisan endorsement as a starting point for reform. Whatever the contours of the final solution, policymakers should recognize the important and growing role that retiree Social Security plays in the economic lives of children.