January 21, 2022

Third stimulus check update: When $1,400 hits bank accounts, what happens to the COVID aid package?

WASHINGTON — Senate approval of President Joe Biden’s $1.9 trillion Covid relief bill on Saturday brought massive legislation one step closer to law.

But first, the bill must return to the other side of the Capitol, where the House — which has already passed its own version of the bill — will vote on Tuesday to approve the changes made in the Senate. That vote is expected to pass on a party line, such as in the Senate, with a narrow Democratic majority.

Only after the House passes the Senate version would it land on Biden’s desk.

After that, the turnaround time – between a bill of more than 600 pages and money in your pocket – could be relatively fast. People could see the $1,400 stimulus payments appearing in their bank accounts within days of Biden signing the bill — which is expected to happen shortly after the House votes on Tuesday.

For the previous pandemic stimulus bill, the Internal Revenue Service began sending out the second round of payments — worth up to $600 — three days after then-President Donald Trump signed that bill in late December. But it’s possible that tax filing season, which is currently underway, could delay the process this time around.

ALSO SEE: Could this be the last package with stimulus checks?

The payments do not all go out at once. Those whose banking information is registered with the IRS are likely to get the money first because it’s deposited directly into their accounts. Others may receive paper checks or prepaid debit cards in the mail.

Still, millions of people could be at risk of missing out because the IRS doesn’t know how to reach them. An estimated 8 million eligible people did not receive the first incentive payment worth up to $1,200, which was approved last year and delivered over the spring and summer. While most people receive the money automatically, very low-income earners who don’t normally file tax returns may need to take an extra step to register online or file a 2020 tax return.

This time, individuals earning less than $75,000 and couples earning less than $150,000 would receive the full payment of $1,400, plus an additional $1,400 per dependent. But the third round of checks would expire faster than previous payments — individuals earning more than $80,000 a year and married couples earning more than $160,000 would be completely excluded, regardless of how many children they have. According to an estimate by the Penn Wharton Budget Model, payments would reach about 90% of families.

Unemployment benefits

On unemployment benefits, Senate and House bills differ on the provisions.

If the House approves the Senate amendments and the bill is signed by Biden in the coming days, the unemployed may see little or no interruption in payments. But it depends on their state.

The Senate bill would continue the existing $300 weekly federal boost and two major pandemic unemployment programs through Sept. 6.

The Pandemic Unemployment Assistance Program provides benefits to freelancers, gig workers, independent contractors and certain people affected by the pandemic, while the Pandemic Emergency Unemployment Compensation Program extends the length of payments for those in the state’s traditional unemployment system.

Unlike the aid package that Congress approved in December, this legislation must be signed before laid-off workers are out of benefits, and there are far fewer changes than in the previous bill, said Andrew Stettner, a senior fellow at The Century Foundation. Still, some states will wait for the U.S. Department of Labor to release all the necessary guidance to reprogram their systems.

Most states should start sending unemployment benefits within three weeks, he said.

Without an extension of the programs, according to The Century Foundation, an estimated 11.4 million people would begin to see their benefits expire after this weekend and gradually disappear over the course of the next month. The $300 improvement also expires next weekend.

When Congress passed the latest emergency law extending unemployment programs, some of the unemployed had already started depleting their pandemic benefits created last March.

Also, lawmakers have added the $300 weekly increase and made changes to the pandemic programs. And Trump waited to sign the bill until after benefits for millions more unemployed Americans expired.

Some states were able to quickly implement the new provisions, but others took more than a month. The delays forced the unemployed to wait for $17.6 billion in benefits in January, according to a separate analysis from The Century Foundation.

Child Tax Credit

However, other measures in the package are new or include larger changes to existing programs — including temporary improvements to the child tax credit and federal premium subsidies for Affordable Care Act plans, as well as to COBRA policies for laid-off workers who want to retain their employer’s health insurance.

Federal agencies would take longer to implement these, so it could take several weeks or even months for Americans to receive them.

For example, families may not see the increase in the child discount until the summer.

The House and Senate bills call for the credit to be increased to $3,600 for each child under age 6 and to $3,000 for each child between the ages of 6 and 17 by 2021. It is currently a $2,000 credit for children aged 6 and under. and 16 years.

The credit would also become fully repayable for the year and can be paid out monthly, rather than as a lump sum at tax time.

According to the law, families could receive half of their total credit as a recurring payment, starting in July and the rest of the year. They could then claim the remaining half on their 2021 tax return.

Health Insurance Grants

Americans who would qualify for the hefty federal premium subsidies from the Affordable Care Act’s policy aid package would have to wait for the new rules to be programmed into Obamacare exchanges, which could take a few weeks.

Enrollees would pay no more than 8.5% of their income for coverage, up from nearly 10% now. Also, those who earn more than the current limit of 400% of the federal poverty level — about $51,000 for an individual and $104,800 for a family of four in 2021 — would be eligible for aid. The provision, retroactive to January, would last two years.

For lower-income enrollees, their premium may be eliminated entirely during the same period, and those receiving unemployment benefits may apply for no-contribution coverage in 2021.

The changes to existing grant programs could be implemented fairly quickly, but implementation of the unemployed benefit may take longer because it is new, said Larry Levitt, executive vice president of health policy at the Kaiser Family Foundation.

Once the systems are updated, those who already have Affordable Care Act policies can return to the exchange to see if they are now eligible for aid or larger grants. Also, the uninsured have until May 15 to enroll for 2021 coverage on the federal exchange, Healthcare.gov, and have extended application periods in most states that have their own marketplaces. Biden directed the reopening of the federal stock market in late January via executive order.

Also, Senate legislation provides for a full premium subsidy until the end of September to laid-off employees who want to remain on their employer insurance through COBRA. House law would require them to pay 15% of the premium, which could still be costly.

Rolling out this provision may take longer as it is an entirely new benefit.

Meanwhile, food stamp recipients would receive 15% more benefits, but the increase would last until September, rather than expire at the end of June, under laws passed by both the Senate and House.


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