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Economic Stimulus Helps Social Security Beneficiaries and SSA

The final economic stimulus package, passed by both the House of Representatives and the Senate, will provide “rebates” to millions of Social Security beneficiaries. The legislation was signed into law by the President on February 13, 2008. All Title II beneficiaries who meet the rebate eligibility criteria – including disabled beneficiaries – will receive the rebate.
More information about the economic stimulus package is available on the website for the Senate Finance Committee,

Rebates will be paid under two options:
1.    Based on income tax paid in 2007: A maximum rebate of $600 ($1200 for married couples); or

2.    Based on $3000 of “qualifying income”: A rebate of $300 ($600 for married couples). “Qualifying income” is defined as the sum of net self-employment income, VA veterans’ disability payments, Railroad Retirement benefits, and Title II Social Security benefits. All types of Title II benefits will count as “qualifying income.” However, a beneficiary who is claimed as a dependent on another’s tax return is not eligible for the rebate.

SSI benefits do not count as “qualifying income.” However, the legislation does provide that rebates will be disregarded as “income” for needs-based federal programs (e.g., SSI) or State/local programs partly funded with federal funds (e.g., Medicaid). The rebate also will not be considered a “resource” for the month of receipt and the following two months. Also included in the legislation is $31 million in funding for SSA in fiscal year 2008. This funding, above the final 2008 appropriation, is intended to help with additional costs to implement the provisions of this package. This is an important development and demonstrates Congressional recognition of the need to provide SSA with the funding to carry out new and additional workloads. In the past, this usually has not occurred and has contributed to the under funding of the agency.

Note: Beneficiaries must file a 2007 federal tax return to receive the stimulus payment. The SSA website,, has a link to general information about the rebate under “News” on the left side of the SSA homepage. An article by the IRS, FS-2008-16, “Stimulus Payments: Instructions for Low-Income Workers and Recipients of Social Security and Certain Veterans’ Benefits,” provides instructions for Social Security beneficiaries. It is available online at In many cases, the taxpayer/ beneficiary will be able to use the short tax return Form 1040A. The IRS article also provides information about groups that will provide free tax preparation.

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