In late December 2021, the USA’s Government distributed the second round of stimulus checks, a one-off $600 payment to any American household to help cover any financial losses faced during the covid-19 pandemic.
To be eligible, households must generate an income of $75,000 or less per year, or a joint couple income of $150,000 to receive the $600. There is also a further $600 awarded for each child you have under the age of 17.
For some, the money is sent directly and immediately into their bank account or they can check the status using the IRS tool, Get My Payment.
However, some have criticised the stimulus checks, especially since the amount offered in the second round is $600, compared to $1,200 in the first round in March 2020. On this second occasion, the eligibility criteria are looked at differently and for millions of Americans, ‘the payment status is not available’ – and they have been sitting frantically waiting for approval.
Dan Kettle, the founder of fintech startup, Pheabs, has raised his concerns about the stimulus checks and whether they are actually helping.
“Receiving a one-off payment of $1,200 or $600 is useful and will certainly help some households, but it falls well below the national monthly average wage of Americans which is around $2,500.”
“When calculating the loss of income for millions of Americans, the injection of $600 will probably not make too much of a difference and strangely it still gives money to people who are working and earning as normal. It could be argued that regular employees, on the same wage as before, do not need this income and it should go to those that need it most.”
“A large proportion of Americans will struggle to claim their stimulus checks and resort to borrowing high-cost products like payday loans, borrowing from friends or selling their homes or cars to get by – at least until the economy picks up again.”
In the UK, individuals were granted “furlough” by their employers where they are not required to work due to coronavirus concerns, but they can still receive 80% of their monthly wage, paid in the same way to their bank accounts.
In addition, UK companies could apply for bounce bank loans of up to £50,000 and complete a 5-minute application and receive funds in just a matter of hours from their local bank.
Some have commended the UK system, saying it has provided employees with almost their entire income and provided significant funding to those companies that needed it, specifically in hard-hit areas such as hospitality, travel, and events.
However, others have criticised the furlough scheme for being ‘too generous’ by offering 80% of a monthly wage to capable workers to stay at home and not offer anything productive, creating a wave of furlough claims and scams that are likely to come out in the future.
“The UK version is not perfect,” Kettle continues. “But for a lot of individuals and businesses, the amounts are so large that they will not negatively affect their financial situation.”
“There will be some people who have fallen on hard times, but generally people should more or less be able to stay on top of their finances. Especially, if you are receiving 80% of your wage, but do not have to pay for travel, office lunches, or things like socials after work. Plus, being able to claim up to £50,000 for your business, with 0% in the first year, is an incredibly generous scheme which many have benefitted from.”