What People Are Expected to Spend the New COVID Relief Package On?

Photo by Alexander Mils on Unsplash

President Joe Biden signed $1.9 trillion Covid-19 economic relief package with benefits including a third round of stimulus payment into law on Thursday afternoon.

It will provide those households with up to $1,400 per qualifying person. For the millions of Americans who have lost income due to COVID, this will provide at least some relief. For others, it will help meet needs that they would otherwise struggle to afford.

How Much Can I Receive from the New Relief Package?

According to cnbc.com, American families who meet the income thresholds will   receive a $1,400 stimulus check, the definition of a qualifying dependent has broadened to include both children and adults of any age who fit the legal criteria.

An average family of four (two parents and two dependents) could receive a total $5,600.

Here are the income limits for receiving a full $1,400 stimulus check:

• Single taxpayers with an adjusted gross income below $75,000 (phases out completely at $80,000 or above)
• Head of household taxpayers with adjusted gross income below $112,500 (phases out completely at $120,000 or above)
• Married taxpayers filing jointly with adjusted gross income below $150,000 (phases out completely at $160,000 or above)

When Will My Payment Arrive?

Americans will start seeing stimulus checks in their bank accounts as early as this weekend.

The checks will begin to hit bank accounts this weekend for those who have their direct deposit info on hand at Treasury and the IRS. Be aware that the volume of users sometimes overwhelms the site.

How Would People Spend the “Free” Money?

U.S. Census Bureau data showed many Americans, especially in lower-income households, used their checks in the same way: to pay for daily essentials like groceries, gas and utilities.

• The average U.S. household spends $21,378 per year on bills, or about $1,782 on expenses each month, according to bill pay service doxo’s latest research.
• The largest chunk of that spending is on housing: The average American spends about $1,268 a month on mortgage payments or $1,023 on rent.
• The average car payment, for instance, is about $374 a month, while utilities tend to average about $290 a month.
• About 10% of Americans are planning to use the stimulus payments to pay off credit card debt.

More than one-third of respondents in a Bloomberg/Morning Consult survey said they will save a significant amount of the money if they get the third stimulus check.

That compares with 23% who said they did so in April last year, when the government sent out $1,200 checks under the Cares Act, and 26% of those who got the $600 checks Congress approved in late December.

Of the households earning less than $50,000 a year, only 17% of respondents said they saved money from the checks last spring—but 29% expect they will be able to do so this time.

References:

• cnbc.com
• abcnews.go.com
• bloomberg.com
• cnn.com
• nytimes.com