While many families will get a larger check, retirees are more
likely to see payments the same size as their first one.
Christy
Bieber (TMFChristyB) Jun 2, 2020 at 6:02AM Author Bio
The Coronavirus Aid, Relief, and Economic
Security Act provided coronavirus stimulus checks of up to
$1,200 per adult and $500 per dependent child. Most American families who are
eligible for COVID-19 payments received these checks already, or will soon. And
plans for a second round of direct payments are underway.
One proposal for more coronavirus money that's
already passed the U.S. House of Representatives, the HEROES Act, would increase the amount of the
second check for millions of families.
But while Social Security beneficiaries aren't left
out of the second round of checks, most retirees won't benefit from the
proposed increase to the second COVID-19 payment. Here's why.
The HEROES Act
provides extra money for dependents
The HEROES Act increases the amount of money
most American families will receive by providing more money for dependents and
expanding who qualifies as a dependent.
While the CARES Act provided a $500 payment
per qualifying dependent, the HEROES Act provides $1,200 instead. This more
than doubles the value of having a dependent.
The HEROES Act also expands who counts as a
dependent. Only child dependents under 17 qualified for the extra money in the
original stimulus check. But any dependent, including adult dependents,
counts for the extra $1,200 under the new proposal. The number of dependents is
capped at three, but this still means a married couple with three kids could
get a payment of $6,000 in the second round of checks while they'd have
received just $3,900 in COVID-19 money the first time.
This is a huge increase for anyone with a dependent. But, most Social Security retirees don't have dependents who'd qualify them for it. Social Security retirement benefits can't be claimed until at least age 62, which means most beneficiaries no longer have young children or college-age kids they still claim as dependents. And while around 5.7 million children under the age of 18 live in grandparent-headed households nationwide , the number of retirees who could potentially claim grandchildren as dependents make up a very small portion of the 45 million seniors receiving Social Security retirement benefits.
For Social Security beneficiaries with no
dependents, the HEROES Act would result in checks of the same amount as the
first time around. And while getting $1,200 per individual is better than
nothing, the reality is that this money didn't go very far to help American families the first
time and likely won't do much to help the second time
either.
Do Social Security
beneficiaries need more stimulus money the second time around?
There's certainly an argument to be made that
families with dependents have a greater need for an expanded stimulus payment
in round two than retirees do. After all, Social Security beneficiaries have a
source of fixed income, while most younger families don't.
But many retirees are still facing financial
hardship due to the coronavirus. Stock market volatility may have led to losses
in investment accounts, reducing the amount that can be safely withdrawn. And
COVID-19 may reduce or eliminate Social Security's cost of living increase next year and
also accelerate the depletion of the Social Security trust fund. This could
necessitate a benefits cut of as much as 24% if changes aren't made to
shore up the program's finances.
If the next coronavirus relief bill increases
the size of COVID-19 stimulus checks for some Americans because payments were
too small the first time, lawmakers should seriously consider taking an
approach to boosting coronavirus money that doesn't leave Social Security retirement beneficiaries with the same
inadequate payment this time around.
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