How Do Stimulus Checks Affect Public Benefits?

by Thomas D. Begley, Jr., Esquire, CELA

Stimulus Payments

U.S. residents who have an adjusted gross income (AGI) of up to $99,000 for individuals, $112,500 for head of household filers, and $150,000 for married couples filing joint returns are eligible for stimulus checks from the federal government, because of the COVID-19 pandemic.  Parents are also eligible for a child payment, if their son or daughter is 16 years old or younger.  The amount of the stimulus check is $1,200 for individuals making less than $75,000 and for heads of household if their adjusted gross income does not exceed $112,500.  Married couples filing joint returns with AGI of up to $150,000 are eligible for the full $2,400 stimulus payment.  Parents are eligible to receive $500 for each child under the age of 17 that they claim on their taxes.  The payment decreases by $5 for every $100, if a person’s income is above $75,000 and under $99,000.  The same goes for a head of household with AGI between $112,500 and $136,500.  Joint filers who have AGI between $150,000 and $198,000 are eligible for reduced payments.

Effect of Stimulus Payments on Public Benefits

What is the impact of these stimulus payments on public benefits?

• Supplemental Security Income (SSI).  SSI is a means-based program.  Receipt of income can reduce or eliminate an SSI payment.  Currently, the federal maximum benefit is $783 per month.  New Jersey has a supplement of $31.50 per month.  The Pennsylvania supplement is $30 per month.  The federal legislation providing the stimulus is known as the CARES Act.  The law is silent as to how these stimulus payments will affect SSI.  The Social Security Administration has not yet issued guidance.  However, it would appear that the payment itself will not be considered income.  Some commentators believe that the money must be spent in the month that it is received in order for it not to be considered a resource.  Other commentators believe that the money can be retained for up to 12 months without it being considered a resource.  

Begley Law Group encourages recipients of the stimulus payments who are receiving SSI to spend the money in the same month it is received.  One easy way to do this is to establish an ABLE account or to contribute to an existing ABLE account.  The ABLE account can be established by going online.  New Jersey residents can Google “ABLE NJ” and Pennsylvania residents can Google “ABLE PA” or if the individual prefers, the ABLE account can be established in another state.  STABLE is a large account administered by Ohio, but includes disabled individuals from all over the country and their website is www.stableaccount.com.  

• Social Security Disability Insurance (SSDI).  There is no unearned income test for SSDI recipients, so those individuals need not be concerned.
• Medicaid.  Many Medicaid programs have a $2,000 resource test.  Therefore, for those programs it is important that the money received be spent or deposited into an ABLE account by the end of the month in which the funds are received.
• Medicare.  Medicare does not have an income test, so individuals receiving Medicare need not be concerned about the effect of their stimulus checks.