Cash Relief for the Homeless: Unbanked Americans Face Unintended Challenges to Reach Stimulus Checks

To Maximize Effect of American Rescue Plan, Widen Access to Cash Relief for Unbanked Americans

Cash Relief for the Homeless

The American Rescue Plan is now law.

Now, millions of Americans have received their third stimulus check of $1400 to cover basic necessities and help boost an economy still under lockdown.

However, many of the Americans who could use stimulus money to the greatest effect have no means to access their checks.

As reported by New York Times reporter Andy Newman, access to stimulus money has been a burdensome challenge for Americans without access to a mailing address, bank account, cell phone, or the internet.

Newman’s reporting led to a conversation with numerous people in New York City who have struggled to access stimulus funding appropriated by Congress to provide financial security over the past year:

“Mr. Velez, born in Brooklyn 58 years ago, appears to qualify and could still collect all three payments, totaling $3,200, if he filed a 2020 tax return.

But he has not filed taxes in years. The closest he comes to the banking system is when he sleeps in an A.T.M. vestibule on Delancey Street. Mr. Velez said that though outreach workers occasionally approached him to offer help, when it came to the stimulus, “No one has mentioned it to me.”

The “Awareness Gap”

Adult Americans who earn under $75,000 each year are qualified to receive stimulus payments. However, those under the poverty line earning under $12,400 generally do not need to file a federal tax return.

Because stimulus dollars appropriated by Congress are based on each individuals’ tax filings, an unintended consequence of these measures leads to inadequate access to the life-changing cash relief for millions who do not have the amenities to access it.

“Paradoxically, the very poor are probably the most likely people to pump stimulus money right back into devastated local economies, rather than sock it away in the bank or use it to play the stock market.”

Andy Newman, The New York Times

“I’d find a permanent place to stay, some food, clothing, a nice shower, a nice bed,” said Richard Rodriguez, 43, waiting for lunch outside the Bowery Mission last month. “I haven’t had a nice bed for a year.”

For those most in need to be barred from accessing life-changing funds intended for them would be a disheartening and ultimately preventable tragedy

Not all of those under these circumstances have been incapable of accessing stimulus money, however, and the means by which they’ve been able to do so present a window of opportunity for Washington to spur action and satisfactory delivery of the checks.

Newman’s reporting led him to a conversation with Mr. Haken of New York City Relief, who described how someone without identification could access their stimulus funding:

“What he’d have to do is get some kind of benefit card with his face on it — something like a soup kitchen ID,” Mr. Haken said. He would then need to sign over the check to someone with a bank account in front of a banker who was willing to say, “That’s good enough.”

This process may help a select few who are able to follow such a process, but it in no way solves the problem on a grander scale.

A Government Mechanism is Needed to Ensure the Policy’s Success Among Low-Income Americans

For those most in need to be barred from accessing life-changing funds intended for them would be a disheartening and ultimately preventable tragedy.

To ensure the newly-passed American Rescue Plan can reach its fullest effect in providing financial security to millions of Americans in need, Congress must level its sights on making certain that every appropriated dollar of direct relief reaches the hands of those it was designed to help.

One such way could be to include an unfunded mandate in the upcoming infrastructure package that states direct resources towards providing services for stimulus access to those who are unable to do so.

A general unfunded mandate for the states to create pathways to reach stimulus money would incur no added cost for the federal government while allowing each state the flexibility to determine how best to create access to cash relief for those in poverty.

Without a mandate or some sort of policy alternative, however, millions of dollars appropriated for the sake of lending aid to those in need will remain out of reach, in limbo. Unnecessary hardship amid the pandemic will progress, and the flow of federal dollars will revitalize regional economies to a lessened effect than would otherwise be realized.