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Saturday, April 17, 2021

Stimulus Check: The Road Forward Post The Approval By The Senate And The Future Course Of Action

The Covid-19 Relief Bill had a smooth passage through the Senate. All it needs now is validation by the House of Representatives and the Presidential signature for the $1.9 T bill to finally become law. It has raised the expectation that the stimulus check will land soon in individual accounts as people battle income loss and layoffs.

The vote by the House of Representatives is to endorse the changes in the original bill passed by the Senate. The outcome is a foregone conclusion as the Democrats have a slight edge in the lower house. Voting is expected to be along party lines. And it then finally moves to the President’s desk before it becomes law.

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The turnaround period for the Stimulus Check is expected to be brief. The time that people can expect the bill to finally pay dividends is short. It should take just days for the stimulus check to be credited in people’s banks after President Biden signs the Bill. That is expected immediately after the lower House votes on the Bill on Tuesday.

During the previous round of the Stimulus Bill, it took the IRS just 3 days after the Presidential signature. By the end of December, people started receiving the next round of payment. They were worth $600 then. But since we are bang in the middle of the tax filing period, the process might get delayed a bit.

The payment will not be disbursed in one go. People who have their details with the Internal Revenue Service will in all likelihood receive their payment earlier. The amount will get directly transferred to their account. Others will receive prepaid cards or paper checks.

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stimulus check
stimulus check

The Risk Of Losing Out On The Stimulus Check

But millions stand to lose out as the IRS has no record of them and would find it difficult to reach out to them. It is estimated that around 8 million people who were eligible for the stimulus check in the first round did not receive it. It was worth $1,200 and it was approved and delivered in the middle of the year.

Most people who had recorded with the IRS received their share immediately. But poor people who do not file returns will have to get themselves registered with the authorities to receive their stimulus check or file tax return for 2020.

The Breakup Of The Stimulus Check

For the third round of the stimulus check, individuals earning below $75,000 per annum would receive in full the $1,400. The same rule applies to couples earning above $150,000 annually. But individuals earning above $80,000 and couples earning more than $160,000 will be completely cut off from the stimulus check. The number of children will not be considered. Approximately 90% of the families are expected to benefit from the stimulus check as estimated by the Penn Wharton Budget Model.

Differences Among The Two Houses On Unemployment Benefits

Both the houses have differed on Unemployment Benefit provisions. If the House of Representatives approves the changes made by the Senate and President Biden signs it, the jobless can expect very little or even no stoppage in their payments. But the rules vary from state to state.

As per the provisions of the Senate bill, the existing federal boost of $300 per week would be continued. Two other pandemic programs benefiting the unemployed would continue through the 6th of September. But the lower house bill had provisions for $400 per week enhancement and is set to continue along with the two epidemic programs through the 29the of august.

Beneficiaries Of The Unemployment Assistance

Freelancers, independent workers and contractors, and gig workers, and other people in similar professions will benefit from the Pandemic Unemployment Assistance program. For those under the conventional unemployment system of the state, the Pandemic Emergency Unemployment Compensation program will increase the payment duration.

The legislation has to be signed before laid-off employees are denied benefits under the third stimulus check scheme. This is in variance with the relief package approved last December by Congress. senior fellow at The Century Foundation, Andrew Stettner, has said that there are fewer changes in the third stimulus bill than in the previous bill.

States have opted to wait for the Labor Department to release the necessary instructions before they reprogram the systems. States are expected to begin sending out benefits to the jobless within 3 weeks, says Stettner.

Any delay in extending the programs could lead to approximately 11.4 M people losing out on the benefits as it begins to lapse a week later. Even the $300 increase will end this weekend.

Even as Congress pushed through the previous relief bill that extended the unemployment benefit programs, several jobless had begun exhausting their benefits created in March 2020.

Lawmakers had also added the weekly enhancement of $300 and changed the programs. Trump had waited for the benefits to lapse for millions of Americans who had lost their jobs before he signed the bill.

Stimulus Check
Stimulus Check

Child Tax Credit In The Stimulus Check Bill

There are several procedures in the pandemic package that are new or have seen major changes in the existing programs. It includes temporary enrichment to the child tax credit. Premium subsidies have been given for Affordable Care Act programs. COBRA policies have been proposed for worker laid-off. It applies to those who opt to retain the health coverage given by their ex-employers.

As they are new, federal agencies are expected to take more than a few weeks or perhaps even months for Americans to receive them. Any increase could take months to materialize.

Both the houses have called for an increase in the credit per child below six to around $3,600 and $3,000 for children between the age of six and seventeen. This is way above the current rate of $2,000 for children between six and sixteen.

The credit is expected to be paid monthly and not annually and could become refundable. Families can expect to get 50% of the sum credit as periodic beginning in July, continuing through the year. They could claim the other half on their tax returns.

Subsidies Under Health Insurance Under The Stimulus Check Bill

Americans qualifying for higher premium subsidies under the Affordable Care Act might have to wait for the current regulations to be linked to the Obamacare exchange. It might take weeks to materialize.

Enrollees would now have to pay only 8.5% instead of 10% of their net income for coverage. Further any American earning above the present limit of 400% of the stipulated federal poverty level is eligible for assistance. The earnings calculated are around $51,000 for individuals and around $104,800 (four-member family) in 2021. This retroactive provision would stay active for a couple of years.

Enrollees with lower-income can hope for their health premium to be waived totally. Those collecting benefits under the unemployment scheme could expect no premium for coverage in 2021.

Adjustments under the existing programs would be processed quicker than the provisions for those unemployed, according to Larry Levitt, the executive VP (health policy) at Kaiser Family Foundation.

With the updating in the system, Americans benefiting from the Affordable Care Act policies can check if they are eligible for larger subsidies or assistance. The uninsured can enroll up to May 15. Healthcare.gov has increased signing periods for states.

The federal exchange has been reopened by President Biden through executive order. Food stamp beneficiaries will continue to benefit from a 15% boost in benefits. It will last till September instead of June as per the Stimulus Check bills that are to be passed both by the House and the Senate.

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