Often there are well-intended government programs that have unintended consequences. As an attorney who handles Social Security disability claims and Medicaid long-term care applications, my first concern when the COVID-19 Economic Impact payments or “Stimulus” package was announced was to wonder how these $1,200 payments were going to affect our clients. Many government programs including Medicaid and Supplemental Security Income (SSI) are “means tested” which means that you must meet the medical criteria and the financial criteria to qualify. In the case of Medicaid for long-term care and Social Security SSI payments, the applicant must meet the medical criteria and be below the resource limit of $2,000 for a single individual. This is a total of all that individual’s assets not including a small list of exempt resources.
If you are on one of these programs it may have taken you months or even years to finally get approved. If you exceed the resource limit once you are on the benefit, you may lose your benefit until you are below the resource limit again. Some cases may even require a complete re-application for benefits if you are over the resource limit for too long. You can imagine that the one-time receipt of $1,200 may cause anxiety for some benefit recipients.
Thankfully the Internal Revenue Service has now provided some guidance on these issues. The IRS has informed us that they will not consider economic impact payments as income for SSI recipients, and the payments are excluded from resources for 12 months. We have confirmed that the Iowa Department of Human Services will treat the stimulus payments the same way for Medicaid recipients, the payments will not be considered income and are excluded as a resource for the first 12 months. This is great news for our clients who can reap the benefit of the stimulus payment but not fear losing their medical coverage as a result of the one-time payment.
If you haven’t done so already, go to the IRS Economic Impact web portal at https://www.irs.gov/coronavirus/economic-impact-payments. This portal is a one-stop shop for all of your stimulus payment questions. If you haven’t received your payment yet, this is where you can check the status, request payment, or provide bank information for your direct deposit. This is also a key stop for anyone who has not filed taxes for the last two years. Non-filers may be eligible for payments as well but you may need to apply for the payments instead of receiving the check automatically.
Thad J. Murphy
Attorney, Pioneer Law Office
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