This study analyses the links between family policy institutions and poverty in households with pre-school children in 21 old and new welfare democracies. New institutional information which enables a separation of different family policy dimensions is combined with micro data from the Luxembourg Income Study. Through statistical multilevel modelling, individual- and country-level data are combined in a simultaneous analysis of their relationships to child poverty risks. The results show that family policy transfers are related to lower child poverty risks at the micro level. However, the mechanisms by which such transfers reduce poverty vary by type of family support. Support to dual-earner families operates by enabling both parents to work and raise market income, while support to more traditional family structures in some instances has a more direct effect on poverty risks. The analysis also renders support to the hypothesis that dual-earner transfers also alleviate poverty most effectively among single-mother households.