One major set of policies Republicans touted in their One Big Beautiful Bill (now officially Public Law 119-21, signed on July 4, 2025) sought to end government benefit payments to illegal aliens. But while the new law advances that agenda, such as by preventing illegal alien parents from receiving federal Child Tax Credit (CTC) payments, it also creates a new loophole and leaves untouched another allowing welfare checks to flow to households headed by illegal alien parents. If the Trump administration wants to fully end benefit payments to illegal aliens, it will have to close those loopholes, too.
Illegal aliens have long been ineligible for most government benefits, including major means-tested benefits often dubbed “welfare.” A House Ways and Means Committee summary of the historic 1996 welfare reform law described its policies as including “a broad ban on benefits for illegal aliens that applies to most entitlement and nonentitlement programs.” As a result, except for a handful of emergency and other benefits, “illegal aliens no longer qualify for most public benefits, including means-tested benefits.”
While that sounds like an airtight restriction, the statement ignored a key distinction. Even though illegal alien adults may not themselves be eligible for key government benefits, others in their household can be—especially their children born in the US who are eligible for welfare and other benefits as US citizens. In those cases, as the adult head of the household, the illegal alien parent can receive often significant government benefits on behalf of their children.
The One Big Beautiful Bill includes several policies designed to limit benefit payments and tax breaks in such cases.
Illegal aliens are already ineligible for benefits under the Supplemental Nutrition Assistance Program (SNAP, generally called food stamps). But one provision (Section 10108) would reduce benefit payments by requiring the counting of their income (or a pro rata share of it, at state option) in determining the household’s eligibility and benefit amounts. The nonpartisan Congressional Budget Office estimates that provision will save taxpayers almost $2 billion over the next decade, compared with prior law.
An even more significant change is embedded in Section 70104, the provision permanently extending and enlarging the CTC, including its present requirement to provide a child’s Social Security Number (SSN) when claiming that benefit. The new law creates an additional requirement that a parent (or the parent’s spouse, if filing jointly) must provide a work-eligible SSN. Elaine Maag of the left-leaning Tax Policy Center notes that provision “would have a somewhat smaller effect” than the House-passed version of the bill, which would have required SSNs from both parents when jointly filing taxes. Maag pointed to congressional testimony indicating the House policy would have prevented an estimated two million children from qualifying for the expanded CTC. Others see even larger effects from the new law, including the loss of “eligibility for up to 2.6 million U.S. citizen children with a Social Security Number (SSN), simply because their only caregiver(s) lacks an SSN.”
That change is designed to prevent households headed solely by illegal alien adults from receiving this federal tax benefit, which Rep. Chip Roy (R-TX) previously argued amounts to “in essence, funding anchor babies.” Ways and Means Chairman Jason Smith (R-MO) stated that under the initial House version of the legislation “millions of illegal immigrants let in by Joe Biden will finally no longer be eligible for refundable tax credits…Only Americans with Social Security numbers will be eligible for refundable tax credits.” There is no dispute that significant CTC benefits have been paid to what supporters call “mixed status households,” as evidenced by the savings projected from changing that eligibility. The nonpartisan Joint Committee on Taxation estimates that the new SSN requirements in the House version of the One Big Beautiful Bill (which were somewhat broader than the final law) would have saved taxpayers almost $40 billion over 10 years.
As the National Immigration Law Center reports, the One Big Beautiful Bill includes similar restrictions on several other tax benefits, including the new senior deduction, tip deduction, overtime deduction, and college education tax credits. As with the CTC, only taxpayers with SSNs valid for work are eligible to claim those benefits, effectively barring illegal aliens.
But the same legislation ironically leaves the door open for illegal alien adults to start receiving federal payments under new “Trump accounts.” The legislation authorizes $1,000 federal deposits into those accounts for each child born in 2025 through 2028. However, as members of the House Freedom Caucus noted in the final stages of debate, “The Senate dropped the requirement that at least one of the parents of children” receiving those $1,000 deposits “have a valid Social Security Number. While children must be citizens under the bill, their parents may now be here illegally.” Longtime congressional tax expert George Callas noted that means that under the new law individuals can “Come to the US illegally and when your child is born here, they’ll get federally subsidized baby bonds.” The Migration Policy Institute estimates that an average of more than 200,000 babies will be born in the U.S. each year in the coming decades to “unauthorized” parents and a smaller number of “temporary immigrants.”
The policy of providing benefits to illegal alien parents on behalf of US-born children resembles a longstanding loophole under the Temporary Assistance for Needy Families (TANF) program, which provides welfare checks and other benefits to low-income families with children. That is, the TANF program continues to pay monthly “child-only” benefit checks (for which one or more children are eligible, but not an adult) to thousands of households headed by illegal aliens. In such cases, an illegal alien adult would not herself be eligible for TANF, but can seek benefits on behalf of children in the household. As a result, an illegal alien mother of two would receive a TANF benefit for a household of two, not three as would be the case if the mother were eligible herself. That smaller benefit (that is, for a household of two, not three) nonetheless would be paid to the illegal alien parent on behalf of her children.
In contrast with the new restrictions on CTC payments, no SSN requirements apply to parents who receive TANF benefits on behalf of their children. In principle, such households have a weaker claim on federal TANF benefits, since they are supported entirely by general revenues supported by other taxpayers, as opposed to CTC payments, at least some of which may reflect a refund of federal taxes the household has paid.
Notably, P.L. 119-21 did not include any TANF policy changes and recent TANF reauthorization legislation introduced by key Republican leaders in the House and Senate does not address this loophole. The current authorization of the TANF program expires on September 30, 2025, and the program has been regularly extended in recent years, generally without changes.
According to the most recent Department of Health and Human Services (HHS) data, over 41 percent of all families on TANF in 2024 were child-only cases. HHS’ 13th Report to Congress on the TANF Program indicates that, nationwide in 2021, more than half (51.5 percent) of child-only cases included “no parent in assistance unit,” which typically means a grandparent or other relative is caring for the children. Another 23 percent reflect cases in which the “citizenship/immigrant status” of the household head bars that person’s eligibility. And 21.5 percent reflect a parent who receives cash benefits from the Supplemental Security Income (SSI) program instead of TANF. Additional cases reflect parents ineligible for TANF due to sanctions, such as for failing to satisfy work requirements, or the 60-month lifetime limit on benefits.
HHS data indicate that California led the nation with almost 67,000 child-only cases in 2021 due to a parent’s citizenship/immigrant status, constituting 28 percent of the state’s total TANF caseload. Those 67,000 California cases made up over two thirds of the over 97,000 TANF families nationwide in that category. The next closest state was New York, with under 10,000 such cases.
Benefit amounts can be considerable. In California, the TANF benefit for a household of two is currently $884 per month. SNAP similarly treats ineligible alien heads as “non-applicants,” while qualifying others in the household for benefits. The current CalFresh (the state’s name for SNAP) benefit for a household of two is $536. In each case, more qualifying household members result in larger benefits. Other available benefits include Medicaid, free school meals, and WIC.
There are also work requirement implications from these cases. Despite being the recipient of the TANF benefit payment for the household, since the ineligible parent is not considered “on” TANF, work requirements that otherwise apply to citizen parents do not apply. That may contribute to the fact that TANF included a greater percentage of nonworking recipients (at 50 percent in 2021) than SNAP (43 percent), whose work requirements were strengthened in P.L. 119-21.
Such exceptions also mean that the TANF changes designed to close loopholes and strengthen work requirements in the 2023 Fiscal Responsibility Act, which President Joe Biden signed into law, will have a limited impact when they start taking effect on October 1, 2025. That will be especially true in California, where a disproportionate share of TANF households are headed by illegal alien adults not subject to work requirements in the first place.
Other policies meant to reduce dependence on welfare checks are undermined when child-only TANF benefits are paid to households headed by illegal aliens. The five-year lifetime limit that applies to adults collecting federal TANF assistance also does not apply in child-only cases. HHS data show that 52 percent of families on TANF in 2023 were exempt from the five-year limit—most often because the adult head received child-only benefits. That reflects how, even as the TANF caseload has declined sharply, a significant share of remaining cases is exempt from TANF policies designed to limit dependence—including work requirements and the five-year limit. That has had predictable effects. While it did not break out duration by type of household head, a 2024 report from the Chapin Hall Center at the University of Chicago found that “TANF cases with only child recipients have longer periods of TANF participation compared to TANF cases with adult recipients.”
Such ongoing TANF and new Trump account loopholes are at odds with the CTC restrictions applied by the One Big Beautiful Bill on payments to illegal alien adults. They also contrast with the administration’s latest moves to end other benefit payments to illegal aliens, announced less than a week after President Trump signed that legislation into law.
On July 10, 2025, HHS announced it was rescinding the Clinton Administration’s 1998 interpretation of welfare reform policy that has allowed multiple taxpayer benefits to be provided to illegal aliens, including Head Start and other social services. As the HHS notice expresses, “The Department anticipates that numerous unqualified aliens will no longer receive benefits under Federally funded programs due to this notice,” deeming that “necessary to remedy the corresponding harm of the denial of limited benefits to those U.S. citizens and qualified aliens who otherwise would receive benefits to which they are entitled, but for them being provided to unqualified aliens.” The shifts are not small. HHS adds that “For the Head Start program, we report a primary estimate of $374 million in annual effects representing incremental expenditures on U.S. citizens and qualified aliens.”
The same day, the Department of Education announced it was ending postsecondary education subsidies for illegal aliens, rescinding a 1997 Clinton administration interpretation allowing for the provision of those benefits. As Secretary of Education Linda McMahon stated in announcing the change, “Postsecondary education programs funded by the federal government should benefit American citizens, not illegal aliens.”
Liberal opponents will continue to vigorously oppose efforts to restrict benefits for illegal aliens and the households they head, arguing such policies “will force many families with low incomes into, or deeper into, poverty.” In contrast, the President’s February 19, 2025 executive order argues the administration’s goal is “preserving federal public benefits” by preventing “taxpayer resources from acting as a magnet and fueling illegal immigration to the United States.” That goal, the order states, is advanced by ensuring “to the maximum extent permitted by law, that no taxpayer-funded benefits go to unqualified aliens.”
Prior to enactment of the One Big Beautiful Bill (OBBB), Vice President J.D. Vance stated on X that “The thing that will bankrupt this country more than any other policy is flooding the country with illegal immigration and then giving those migrants generous benefits….The OBBB fixes this problem. And therefore it must pass.” That overstates both illegal immigration’s contribution to the country’s soaring debt and deficits and the degree to which the new law “fixes” what the administration sees as the problem. The continued payment to illegal aliens of TANF, other benefits, and now deposits into Trump accounts suggests the administration has more work to do to realize its vision of ensuring that “no taxpayer-funded benefits go to unqualified aliens.”