$250 Economic Stimulus Payment Questions And Answers

Here are some questions and answers that I have prepared about the $250 stimulus payments under the American Recovery and Reinvestment Act (ARRA):

• Who is eligible? Anyone who was entitled to Supplemental Security Income (SSI) or to any of the following Social Security benefits at any time during the period November 2008 to January 2009: retirement, wife's and husband's, disabled adult child (but not other child's benefits), widow's and widower's, mother's or fathers', parent's, disability insurance benefits, special age 72 benefits. Note that my answer relates only to eligibility based upon Social Security entitlement. There is also eligibility based upon receiving VA or Railroad Retirement benefits.
• Update: Are children eligible for $250 payments? I thought that I had already made this clear, but I keep getting questions about it, so let me be very specific. Children only qualify if they are on SSI or if they are receiving disabled adult child benefits. Only children who are receiving benefits because they are disabled are eligible for the $250 payments. Generally, children do not qualify for the $250 payments.
• Update: Do I have to do something to get the $250 payment? No. It is supposed to come automatically.
  
• Does the payment to Social Security beneficiaries come out of the Social Security trust funds? No. The Act says that these payments come out of appropriated funds.
  
• Will the payments be made to people living outside the U.S.? No. The Act limits it to those whose listed residence is in the U.S. or a U.S. territory.
• Will I be taxed on this income? Not by the federal government.
• Can my $250 payment be seized for payment of my debts? Generally no, but it could be seized for a federal tax debt or a child support obligation to the same extent that Social Security benefits could be seized. I think it could be seized for a debt owed the Social Security Administration or for another federal debt, such as a student loan, but I would have to study it more to be certain.
  
• Will an individual who is entitled to two benefits, such as Social Security and SSI, get two checks for $250? No, but avoiding this will be a challenge for the computer systems at Social Security and the other agencies involved. Mistakes, even a lot of them, would not surprise me. The databases were not set up with the idea of administering this program.
  
• Can more than one $250 payment be made on a Social Security number? Yes.
• Can more than one $250 payment be made to a household? Yes.
  
• When will the checks or direct deposits be issued? As soon as the Treasury can do it, but no later than 120 days after enactment. If President Obama signs the bill on Tuesday, February 17 as planned, the deadline for payment would be June 17. Update: Social Security hopes to get the payments out by late May.
  
• I am applying for benefits for the time period November 2008 to January 2009 but I have not yet gotten the benefits yet. Once I get approved for these benefits, do I get the $250 payment? Yes, but there is a time limit on this. No payment can be made after December 31, 2010.
• I am on SSI. Does the $250 count as income which would reduce my SSI benefits? No and it will not affect your Medicaid or Food Stamps or other federally funded needs based benefits either.
• I am an attorney who represents Social Security claimants. My fee is one-quarter of my clients' back benefits. Some of them will receive a $250 payment as back benefits. Will I receive a quarter of the $250 payment? Probably not. Update: I had earlier thought that the problem of claimants dying before receiving payment was an argument in favor of these payments being treated as a Social Security benefit subject to attorney fee withholding, since the Social Security Act has rules which are convenient to the agency on how payments to decedents are handled, but this Act actually forbids payment to those who die before receiving payment. That does not completely solve the problem of people dying before receiving their money but it does greatly limit the problem -- and Social Security may be able to offload the remaining problem to the Department of the Treasury anyway. Probably, they will not treat these benefits as being subject to attorney fee withholding since the Social Security Act limits withholding to benefits paid under the Social Security Act. 42 USC §406(a)(4). The ARRA does not amend the Social Security Act, so the benefit payments are not made under the Social Security Act. It may be easy for Social Security's Office of General Counsel to say this, but it may be considerably more difficult for Social Security's payment centers to implement it in this way.
  
• Will computing and authorizing these payments and dealing with questions from the public relating to them cause problems for an understaffed Social Security Administration? My guess, or perhaps hope, is that this will not be too hard for Social Security. The Act is fairly simple and Social Security is getting a $90 million appropriation for administering it. The holdup might be Social Security's computer system. They did do something like this last year without much of a problem, but this is still going to be a challenge. Avoiding double payments may be the hardest part and that problem goes beyond Social Security, since the Department of Veterans Affairs and the Railroad Retirement Board are also involved.