$1,400 checks for low-income adults and parents in the third stimulus package making its way through Congress could come at a critical time to help consumers pay bills, Morning Consult research shows.
2/16/2021 10:00
A recent survey from Morning Consult shows another round of stimulus checks tailored toward consumers with lower incomes as well as improvements to unemployment benefits will be key in helping those groups pay their bills and avoid debt.
U.S. House of Representatives committees reviewed the latest $1.9 trillion stimulus package from President Joe Biden last week, and it is expected to go to the House floor the week of Feb. 22.
This time around, the income range used for the $1,400 stimulus checks earmarked in the bill is $75,000 for individuals and $100,000 for couples, according to CNN.
Higher-earning consumers may not receive a check, or not as much.
How will that help consumers as the COVID-19 pandemic and economic hardships continue?
Morning Consult has released the results of a poll and household survey data that say $1,400 stimulus checks issued March 1 would narrow financial hardships for more than 20 million adults through July.
“A third round of $1,400 stimulus checks more narrowly targeted to low-income adults and parents combined with enhancements to the country’s unemployment benefit system would prevent unnecessary financial hardship and mitigate future economic risks,” Morning Consult economist John Leer reports.
This research on the financial help brought by the additional stimulus checks, as well as unemployment insurance to replace the benefits that will end in March and April, reflects what ACA International members working with consumers in the last year have experienced.
During the COVID-19 pandemic, ACA members have experienced an unprecedented number of inbound calls. Consumers are seeking to communicate with ACA members so they can control their own financial health.
ACA members have experience in helping consumers during times of uncertainty and offer well-established training and hardship programs to help consumers make arrangements that best suit their unique financial situation, according to ACA’s latest advocacy research.
Consumer Spending and Expenses
Morning Consult’s research also reflects consumers’ experiences with the stimulus checks they have received thus far through COVID-19 relief legislation.
“According to a survey conducted at the beginning of February, Americans with annual household incomes under $50,000 already spent roughly 67% of money they received,” Leer reports.
Single parents have used 70% on average of the money they had from the second stimulus check, while two-parent households spent 65%, and non-parents spent 60%, according to the article.
The need for additional stimulus funding and a shift in the income qualifications is also shown in data on consumers who received payments but are still experiencing financial hardships.
“Despite the second round of stimulus checks in January, the number of adults who experienced financial hardship in January remained relatively unchanged from December,” Leer reports.
For example, 16% of survey respondents in January said their expenses were more than their incomes for the month, compared to 15% in December, according to the article. These results were concentrated among households with $50,000 or less in annual income, and show that approximately 30.2 million adults could not pay their bills in January.
Overall, $1,400 checks issued as part of the next stimulus bill will allow “22.6 million adults to pay their expenses for at least four and a half months without incurring additional debt or eating further into their depleted savings, assuming that they maintain income from work and unemployment benefits. If the checks are sent on March 1, these payments would allow 22.6 million Americans to pay their bills in full through the middle of July,” Leer reports.
Previous stimulus checks for married couples filing joint taxes or surviving spouses were available for household incomes up to $150,000.
Leer determined if Congress approves a bill with an upper income threshold of $100,000, 20 million consumers would still have finances to pay their bills through July.
With negotiations from House committees on Biden’s proposal complete, it will be packaged into a bill by the House Budget Committee and is expected to be considered by the full House of Representatives next week, Bloomberg reports. Democrat leaders have said the legislative package would pass by mid-March, when some benefits approved as part of past COVID-19 aid will expire, according to the article.