Federal Beneficiaries Continue to Qualify for Third Round of Stimulus Checks

Under the American Rescue Plan, passed by Congress on March 11, 2021, people who receive Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are automatically qualified for the third round of stimulus checks. While the IRS has yet to publish a specific date when individuals who receive federal benefits will receive their third stimulus payment, the IRS continues to send out Economic Impact Payments (EIPs) in batches, usually every week.

On Wednesday, the Treasury Department released a statement regarding individuals who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool to claim a previous stimulus payment, stating that “the IRS is working directly with the Social Security Administration, the Railroad Retirement Board and the Veterans Administration to obtain updated 2021 information to ensure that as many people as possible are sent fast, automatic payments.”

One difference in this third round is the way federal beneficiaries may receive their payments. During the first round, most SSI and SSDI recipients received their payment through either a physical paper check or a direct bank account transfer if the IRS had an individual’s bank account on file. However, with this third round, federal beneficiaries will likely receive their money the same way they receive their usual benefits, including through a Direct Express card.

The Direct Express card is a debit MasterCard the U.S. government uses to transfer federal benefits to recipients. Only those who currently have a Direct Express card are eligible to receive their payments in this way, and those who recently closed their Direct Express card account will receive a reissued payment from the IRS most likely in the form of a paper check.

According to Roger Drake, a California attorney who assists people in collecting Social Security (SSI & SSD) benefits, Social Security Disability beneficiaries should receive their stimulus money in the same manner they receive monthly benefits. “If you get your monthly benefits by direct deposit,” says Drake, “you should get your stimulus money that same way.” Income limits, however, still apply. “So if you made more than $80,000 individually or $160,000 as a family in 2020,” Drake cautions, “you won't qualify for the stimulus money.”

Folks receiving Supplemental Security Income (SSI) from Social Security are subject to strict income and resource limits to maintain eligibility for government benefits. For SSI beneficiaries, Drake explains that the stimulus money is not considered an asset and will not count toward the $2,000 SSI resource limit for 12 months. “SSI recipients should be sure to spend this money over the next year,” Drake warns.

The IRS has stated that if a federal beneficiary is missing any or all of their stimulus checks they will need to file a 2020 tax return, even if they do not normally file taxes. Additionally, if they gained a dependent in 2020, they may need to file their 2020 taxes to claim that dependent and therefore receive the stimulus money guaranteed for dependents.

Annual statistics published in October 2020 reported that in 2019, approximately 10 million people received disability benefits from the Social Security Administration (SSA). One in seven disabled beneficiaries also received SSI payments.

The SSA defines disability differently than other federal programs and only pays benefits for total, not partial or short-term, disability. To qualify, a person must be younger than the full retirement age and be insured for disability benefits. Section 223(d)(1) of the Social Security Act determines that a disability is an “inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment” and is “expected to last for a continuous period of not less than 12 months.”

Under the Social Security Act, all disability cases must be routinely reviewed depending on the severity, but coverage generally lasts as long as the person remains disabled. If a person’s disability is determined at the initial application as not expected to improve, their case will be reviewed once every five to seven years. However, if a condition is expected to improve, the case will be reviewed as quickly as every six months.

The House Ways and Means Committee stated that about 30 million Social Security recipients are still waiting on their third stimulus check. Instead of blaming the IRS, which issues the checks, the Committee is accusing the SSA of not responding to the IRS requests for information promptly. The IRS requested payment information two weeks before President Joe Biden signed the American Rescue Plan into law, but the SSA did not respond with the information until March 25, 2021.

The SSA Commissioner Andrew Saul stated that the delay in responding to the IRS was mostly because the SSA “received no direct appropriation from American Rescue Plan for the work and had to form a “reimbursable agreement with IRS” to move forward.” The IRS has yet to respond on the expected time it will take to issue the stimulus payments for these individuals.

Attorney Drake describes Social Security Disability as a safety net for some of the most vulnerable people in society and views the stimulus checks as a much-needed add-on to those disability benefits. He therefore encourages anyone who is eligible for the stimulus payment to make sure they receive it.

“I have had clients tell me they either they flat out do not want the money or have concerns about taking the money,” says Drake. “I always tell them this is money you deserve either because you paid into the system when you worked or that we as a society believe you deserve due to your circumstances to help build a better world.”