Americans need more COVID-19 money, but it's not clear whether an additional direct payment will come. One of the problems that's making it challenging for lawmakers to authorize more coronavirus stimulus funds is that there are so many competing proposals for how that payment should be structured.
The goods news for Social Security beneficiaries is that most of the proposals on the table would provide them with at least some additional money -- even if they wouldn't get a bigger check the second time around. But sadly, there's one bill on the table that would mean the vast majority of Social Security retirees will get nothing at all.
This stimulus plan would exclude most Social Security retirees
The proposal that's gaining ground that retirees should be wary of is called the Reopening America by Supporting Workers and Businesses Act of 2020. It was introduced by representative Kevin Brady (R-TX), the top Republican on the House Ways and Means Committee.
This Act would give people on unemployment who return to work $1,200 for doing so. It's intended to serve as an incentive to get people back to their jobs, even as 67% of those receiving jobless benefits get more money on unemployment.
Out-of-work Americans are getting these big unemployment payments because coronavirus relief legislation provided an additional $600 per week in benefits on top of state maximums (through July 31). Brady's proposal would allow workers to keep this extra money for up to two weeks after going back to work. That means those who resume their jobs before the end of July would get $600 in extra cash per week for a total $1,200 stimulus payment.
The problem is, most Social Security retirees don't work. Research has shown less than 3 in 10 seniors still hold jobs in retirement. And there's lots of reasons for that, including the fact that those who are under full retirement age can temporarily lose some of their benefits if they earn too much on-the-job income. For the vast majority of seniors without jobs, a COVID-19 stimulus proposal that amounts to a $1,200 hiring bonus won't provide any financial help, at all.
And that's a big issue, as many retirees have faced stock market losses that have affected their financial security, while every senior getting benefits is facing the possibility of a small or non-existent cost of living increase next year.
How likely is it that this proposal will become law?
As the novel coronavirus officially pushes the country into a recession, lawmakers remain divided over whether to provide additional direct payments to Americans or what other steps should be taken to support struggling families. In fact, although the House of Representatives passed the HEROES Act to provide COVID-19 stimulus checks, 14 democrats voted against it, and it's been declared dead-on-arrival in the Senate.
With Republicans and Democrats conflicted over whether to expand unemployment benefits, provide additional stimulus money, or focus on encouraging more hiring, it's possible Brady's proposal could be seen as a compromise solution. After all, it gets more money into the pockets of Americans while also aiming to get people back to work. So if you're a Social Security retiree and you don't want to see this Act chosen over others that would provide you with more coronavirus stimulus funds, contact your representatives and let them know.
Unfortunately, even if Brady's proposal is shot down, there's still no guarantee another bill will pass that offers you extra money. Since you can't count on more cash from Uncle Sam, make sure you use your first stimulus payment wisely and take other steps to bolster your own financial situation, including making wise investments and keeping your spending reasonable during the coronavirus recession.