Some families could get more than $ 14,000 in new Covid aid. It looks more and more like a universal basic income

As Congress works to finalize its latest coronavirus relief law, some American families face financial collapse.

Between new $ 1,400 stimulus checks and an expanded child tax credit, some families could get more than $ 14,000.

“The focus was on $ 1,400 when a family of four should really be focusing on $ 14,000,” said Ed Mills, policy analyst at Raymond James in Washington. Mills wrote about the potential income surge this week.

The new stimulus checks would provide $ 1,400 per person, including dependent children and adults.

More from Personal Finance:
The legislator asks whether the tax credit for new children is too much or too little
Still no stimulus test? What that means for your tax return this year
Small business owners confused by PPP rules open the priority window

Like the previous direct payments, they would be based on certain income thresholds. Married couples who jointly submit income up to $ 150,000 are eligible for the full amount.

For a family of four with incomes less than $ 150,000, this would add $ 5,600 in new stimulus check money to the $ 2,400 they received in January ($ 600 per person) for a total of $ 8,000. Assuming the bill moves as planned, that deposit could come in late March, according to Mills.

Then the expanded child tax credit could provide an additional $ 6,000 to $ 7,200 per family.

Currently, families are paid $ 2,000 per child under the age of 17 if their income is less than $ 200,000 for individuals or $ 400,000 for married couples.

The new proposal is to increase these amounts to $ 3,600 per child up to 6 years of age and $ 3,000 for children 6 to 17 years of age for married couples earning less than $ 150,000.

The new plan would also allow families to receive the child tax credits monthly. Starting in July, they could receive up to $ 300 per month for children 6 and under and $ 250 per month for children 6 to 17 years old.

Overall, that would add up to more than $ 14,000 for a family of four. This excludes increased federal unemployment benefits if they are qualified. The new coronavirus package aims to provide unemployed workers with an additional $ 400 per week. This compares to the $ 600 per week approved a year ago and the additional $ 300 per week that will expire in March.

The additional financial aid is intended to help individuals and families overcome the Covid-19 pandemic.

According to Mills, the social safety net is also being reconfigured.

“A test of universal basic income has arrived in the US,” he wrote this week.

The universal basic income gives people a grant to live. The concept received more attention in 2019 when Andrew Yang, then a Democratic presidential candidate, called for people to be sent $ 1,000 a month.

The proposal brought universal basic income into mainstream conversation and away from the sidelines.

“There was a clear constituency for that,” said Mills.

Then, as the Covid-19 pandemic set in, the provision of additional income through stimulus checks, unemployment insurance and now the child tax credit became one of the tools that were deployed.

“In the financial crisis, the Democrats felt they were doing too little,” Mills said. “Here you have decided that if you do too much you will be wrong.”

That doesn’t necessarily apply to Republicans who questioned the extra unemployment benefit, which was the first part of an experiment with the universal basic income last March, Mills said.

During the financial crisis, the Democrats felt they had ultimately done too little … Here they decided that they wanted to be on the side of too much. “

Ed Mills

Washington political analyst Raymond James

The party’s stance was complicated by the support of former President Donald Trump, a Republican, who provided additional income to families through unemployment benefits and incentive controls.

“I expect that in the future, Republicans in Congress will have a more traditional Republican view of some of these programs and provide less support,” Mills said.

The exception is the proposal by the Republican Senator from Utah, Mitt Romney, for a child tax credit, which also provides for monthly income for families.

After the experiments are done, the question arises how long the financial support will last.

“What we are seeing in DC is that once the toolkit has been expanded and a federal benefit is in place, it is very difficult to go back that path,” said Mills.

One provision most likely to be extended could be child tax credit, according to Mills. The Democrats’ current plan would only add a year to this.

“This has everything to try to be a test run for something more permanent,” Mills said.

Comments are closed.