Low-income advice: Spend
BOISE – Low-income Americans who receive government benefits are getting perhaps a surprising message from the federal government about their economic stimulus checks: Use it or lose it.
With more than 130 million Americans due to receive checks of up to $600 per person and $300 per child, people who are on Medicaid, food stamps or other federal benefit programs will need to be ready to spend.
“Basically, the feds say they won’t count it as income the first month, but the payments are meant to stimulate the economy, so if you don’t use it in three months, they’ll consider it as a resource,” said Tom Shanahan, spokesman for the Idaho Department of Health and Welfare. “So if you put it in the bank, in three months they’re going to just look at it as money in the bank.”
Most federally funded income-based assistance programs for the poor have limits on assets as well as income for families to be eligible – so the money could affect eligibility if it’s not spent in three months.
“Anything that’s coming from the federal government has that requirement in it,” said Kathy Spears, spokeswoman for the Washington State Department of Social and Health Services.
Shanahan said he hasn’t heard from worried recipients about the rule. “I’m sure with the cost of gas, with the cost of food, it could be used pretty easily right now by most people who are low-income, because more of their income is going to necessities now than before,” he said.
The largest programs affected by the rule are food stamps and Medicaid. But other programs that use federal funds, including the Idaho Child Care Program, mental health and substance abuse services, the Low-Income Home Energy Assistance Program, welfare cash assistance programs, and home weatherization assistance programs all are covered by the rule.
Some programs, including the Women’s, Infant’s and Children (WIC) nutrition program and Women’s Health Check cancer screening, are excluded.
If the recipient of an economic stimulus check owes back child support or unpaid student loans, the federal government will divert the money into paying off that debt.