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3 Things Social Security Beneficiaries Need to Know About Plans for a Second COVID-19 Stimulus Check

By Christy Bieber – Jun 1, 2020 at 7:45AM

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A second check isn't certain yet, but if it happens, here's what Social Security beneficiaries should expect.

COVID-19 has had a big impact on the finances of most Americans, including retirees receiving Social Security. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided payments of up to $1,200 per adult and $500 per child dependent to help families cope with the fallout. But this coronavirus-related money wasn't nearly enough to help many in the U.S., so lawmakers are talking about a second wave of direct payments. 

While discussions are still under way, and no plans have been finalized yet, here's what you need to know about how a second COVID-19 stimulus check would most likely affect your finances if you receive Social Security benefits. 

Older woman looking at check and holding calculator.

Image source: Getty Images.

1. Social Security beneficiaries are included in almost all proposed plans for additional funds

There are multiple proposals to provide additional stimulus money, including the HEROES Act that has already passed the U.S. House of Representatives. The HEROES Act (and several other bills under discussion) would expand the number of people getting stimulus money, such as by including taxpayers without Social Security numbers who were left out of the first stimulus payment. None of these proposals introduces any additional exclusions, so Social Security beneficiaries who received money last time would get it again. 

The only way some Social Security beneficiaries might be left in the cold is if the second round of stimulus funds is delivered in the form of a payroll tax cut. President Trump has expressed support for cutting these taxes, even down to $0, and the Getting America Back to Work Act proposed by Sen. Josh Hawley (R-Missouri) would offer tax rebates for 80% of employer-paid payroll taxes. 

For Social Security beneficiaries who don't work, payroll tax cuts wouldn't provide any help since they don't pay these taxes. The good news: Payroll tax cuts aren't a popular option and are very unlikely to make it into any compromise stimulus bill since they'd do nothing to help the millions left unemployed by the great lockdown. 

That means if more financial relief comes to Americans, Social Security beneficiaries can likely count on getting their hands on some of that additional COVID-19 money. 

2. Plans that provide more money for dependents largely wouldn't benefit Social Security retirees

The first COVID-19 payment didn't do much to help most American families because it was for a pretty small amount relative to household income and expenses. Several proposals for a second round of stimulus payments would correct this by providing more money the second time around -- but not for everyone. 

The HEROES Act, for example, would offer the same maximum payment of $1,200 per adult (subject to income limits) as the CARES Act. But it would provide $1,200 for each dependent (up to three total), while the CARES Act offered only $500 per child dependent. More people would qualify for these extra funds under the HEROES Act too, including college students and adult dependents who weren't eligible, since the CARES Act made the extra $500 available only for child dependents under 17. 

Unfortunately, most retirees on Social Security don't have dependents because their children are grown and they aren't supporting aging relatives. As a result, Social Security retirement benefit recipients are likely to see checks of the same size while families get more money. 

Some proposals, such as the Emergency Money for the People Act, would offer larger payments for everyone, not just those with dependents. But Republicans have already balked at the price tag of the HEROES Act, so the Emergency Money for the People Act -- which would provide monthly payments of $2,000 for a full year for every American 16 and up plus additional money for dependents -- probably doesn't stand much chance of passing. 

3. You shouldn't have to do anything to get your money the second time around 

Whatever bill Congress ultimately passes, the IRS will almost assuredly be in charge of distributing direct payments again. And since they've done it before, the process should be faster and simpler this time around.

The IRS will likely use either 2018 or 2019 tax returns or Social Security statements again to determine where to send payments and how much to deposit, so most Social Security recipients won't have to act to get any money that's forthcoming. 

Pay attention to plans for additional stimulus funds

Congress is likely to take action on another coronavirus stimulus bill over the next few weeks. If you want to make sure Social Security beneficiaries are included, consider contacting your representatives and urging support for direct payments rather than a payroll tax cut. And be ready to use any money you receive wisely by saving it, investing it, or paying essential bills with it if a second payment does arrive in the coming weeks. 

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