Coronavirus stimulus checks may cost you eligibility for disability benefits

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Stimulus checks proved to be a lifeline for millions of Americans hit hard by the coronavirus pandemic, including those who get disability benefits. However, many people reportedly lost their eligibility for disability benefits because of the coronavirus stimulus checks.

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Coronavirus stimulus checks and disability benefits

Since the start of the pandemic last year, Congress has sent out three stimulus checks. Since these payments are a type of tax credit, they are not part of one’s income. Thus, the stimulus payments weren’t supposed to be considered to decide the eligibility for social security programs, including disability benefits.

However, a report from HuffPost notes that many people might have lost their eligibility for benefits due to more than required money in their bank accounts. Citing legal aid attorneys, the report says that the SSA (Social Security Administration) suspended disability benefits for some recipients because the stimulus money pushed the balance in their bank account above the $2,000 limit.

This limit of $2,000 ($3,000 for couples) excludes home, car and a few other assets. It was last updated in 1989. The report, however, notes that this might have affected only a few of nearly 8 million beneficiaries.

The disability benefit program provides $794 a month to eligible people. It is believed that most disability benefit recipients would have qualified for the full amount from the three stimulus checks (of up to $1,200, $600 and $1,400) sent so far.

Is it a mistake?

As per federal law, the tax credits, in any form, shouldn’t be considered part of income or “resources,” within a year of their receipt, to determine the eligibility for social programs. So, it is possible that the SSA might have made a mistake in canceling the benefits of the recipients.

It is also possible that the SSA cancelled the benefits of only those who got their first stimulus payment in April, and haven’t spent it. This would have caused their bank account to exceed the limit.

However, the report cites a case from last year when the SSA suspended the Supplemental Security Income of a Philadelphia resident. This means the suspension was not on the basis of the one-year rule. As per the report, the SSA will withhold 10% of the monthly benefits of that person until it recovers the extra money sent last year.

Either way, the SSA will have to come up with an explanation on why it suspended (if it has) the benefits for some. Many argue that such a situation wouldn’t have come up if authorities had raised the resource limit, something that hasn’t been done since 1989.

The SSA, it seems, is aware of this issue and is working to address it. Meanwhile, those who have lost their eligibility for disability benefits over the last year, and believe it is because of the stimulus checks, should register a complaint with the SSA.