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Congress passed new legislation Friday that will put stimulus relief checks in the hands of millions of Americans.
The checks will amount to $1,200 for those who earn $75,000 or less, and $2,400 for couples making $150,000 or less. The legislation now heads to the desk of President Donald Trump, who has said he will sign it.
A big question among individuals who are living on Social Security or other government benefits is whether they will be eligible for a relief check.
The answer is yes, regardless of whether they are on Social Security, Supplemental Security Income, or SSI, or veterans benefits.
“They are eligible,” said Michael Zona, a spokesman for Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee that put together the legislation.
“There aren’t provisions explaining a list of people eligible — it’s a broad definition, meant to be as all-encompassing as possible,” Zona said.
Like other Americans, the size of the checks for those on Social Security will be based on their adjusted gross income as reported on their tax returns. The stimulus bill calls for using that information from 2019 filings, if they are in, or otherwise 2018.
However, some Social Security beneficiaries do not file returns either because they do not have taxable income or their tax liability is very low. In that case, their relief checks will be based on information in their 1099 form.
But not everyone receives those forms, particularly those who are on Supplemental Security Income, or SSI, because that is not taxable income.
“A possibility is for the [approximately] 4 million individuals affected by this quirk to file zero-liability tax returns,” said Webster Phillips, senior policy analyst at the National Committee to Preserve Social Security and Medicare.
“But no one knows for now how this will be handled,” Phillips said.
SSI benefits are provided to older, blind or disabled individuals who have little or no income.
“They’re the very poorest among us,” said Nancy Altman, president of Social Security Works.
While the government already has their addresses and sends them monthly payments, they may still have to file a tax return just to get their stimulus money, she said.
“The people who are really focused on that population are trying to figure out how this is going to work,” Altman said.
Plus, all payments will be disbursed by the Treasury Department and not the Social Security Administration, which is a complication, she said.
Still, both advocacy groups applauded the fact that the package covers Social Security beneficiaries.
“That will go a long way,” Altman said of the $1,200 checks.
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The legislation does not include the extra $200 per month in Social Security benefits that some Democratic senators, including Elizabeth Warren, D-Mass., had proposed.
However, because additional stimulus legislation is anticipated, there could be another chance to get that passed.
“I think that will present another opportunity to add the proposal to it,” said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.
One proposal that did make it into the final legislation is the payroll tax holiday for businesses.
Typically, both workers and employers each contribute 6.2% of wages to Social Security. Now, employers will get a break on those taxes until the end of the year, if they wish.
“We’re concerned that it could be something that would become permanent and make the (Social Security) program more vulnerable to privatization or benefit cuts,” Adcock said.
Source : CNBC