The finances of millions of families have been hugely impacted by the pandemic, with Census Bureau data (opens in new tab) showing that more than 1 in 3 households - and half of Black and Latino households - are struggling to pay for usual household expenses like rent and groceries during the health crisis. With many inevitably having turned to credit cards, personal loans (opens in new tab) and, most worryingly, payday loans (opens in new tab) to help see them through, it is hoped the new funds delivered by stimulus check 3 will provide some respite, for a short while at least. For those whose income has been less affected by recent events, a third stimulus check also provides the opportunity to perhaps buy life insurance (opens in new tab), sales of which have rocketed since the crisis hit, or to put money away or invest it (opens in new tab) to cover future financial problems.
What do we know about a third stimulus check?
While the finer details of stimulus check 3 will need to be approved in Congress, it seems likely that eligibility for the third round of payments will run on similar lines to stimulus check 2 (opens in new tab), under which individuals earning under $75,000 a year and joint-filing couples on a combined income of up to $150,000 qualify for the full payment. One important change Biden plans to make, however, is to expand eligibility to adult dependents, who have been left out of previous rounds of relief, and all mixed status households. The President-elect has also promised to ensure that the Treasury Department has the “flexibility and resources” it needs to deliver stimulus checks to the families that need them most, including those that are still waiting for the first $1,200 checks (opens in new tab) they are entitled to under the CARES Act. While those who haven’t received their money, or have been under-paid, are in line to receive a Recovery Rebate Credit once they’ve filed their taxes (opens in new tab) in the coming months, it might be the case that Biden fast tracks the process so that the funds are distributed without people needing to load up their tax software (opens in new tab) first.
When could a third stimulus check arrive?
The small matter of Biden’s inauguration on January 20 must come first and then, of course, there’s Congress to negotiate the relief package through. While the Senate is soon-to-be Democrat-led, a paper-thin majority means there can be no assurances that the plans will sail through to immediate fruition without some toing and froing. However, assuming a third stimulus check does gain approval in some form or another, if the plan is to distribute funds as they have been before, there should be little to stop payments arriving in people’s online bank (opens in new tab) accounts within days of sign off. Some payments will still also be sent by check in the mail or by debit card, but with all the necessary systems and processes in place, and having been employed twice already, the vast majority should receive their payments very quickly.
How will Biden help the unemployed?
Besides stimulus check 3, the President-elect’s rescue package outlined plans to extend the unemployment insurance programs that have been introduced to help the millions who have lost their jobs due to the pandemic. In particular, he wants to increase the additional unemployment benefit that those out of work are receiving on top of their usual benefits to $400 a week from $300 a week and extend the scheme through September. While the amount still falls short of the $600 that was paid under the Cares Act, Biden wants to extend the payments through September, in a move sure to be welcomed by those who went more than five months without extra assistance between the original scheme (opens in new tab) ending in July and a new one being introduced with stimulus check 2 at the end of December.
What about housing assistance?
To help struggling households keep a roof over their heads, Biden has also called for an extension of the national eviction moratorium, which expires on January 31, to September 30. With 1 in 5 (opens in new tab) renters and 1 in 10 homeowners with a mortgage behind on payments (opens in new tab), a wave of evictions and foreclosures is likely in the coming months unless action is taken. Mortgage companies (opens in new tab), credit card issuers and other lenders reacted swiftly when the crisis first hit, providing extra flexibilities (opens in new tab) to try and help borrowers. Under his new proposals, the incoming President pledges $30bn in rental and utility assistance for those struggling to pay bills. While acknowledging “these plans won’t come cheaply”, Biden said a failure to act “will cost us dearly”.
