1 1 (March 19, 2020)

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               Researh Sevice






COVID-19 and Direct Payments to

Individuals: Historical Precedents



March 19, 2020
Members of Congress and the Trump Administration have signaled their support for making direct
payments to individuals to address the economic fallout from the COVID- 19 outbreak. In current
discussions, these payments are sometimes framed in terms of universal basic income or UBI proposals.
In the past when these proposals were made-and sometimes enacted-they were framed in terms of
providing economic stimulus.

Historical Precedents
There are historical precedents for such payments; most of these were done through the federal income
tax code. The Internal Revenue Service (IRS) sent checks to taxpayers in 1975, 2001, and 2008. An issue
with using the IRS to make payments to individuals is that payments generally have been restricted to
those who file federal income tax returns. Those who do not file tax returns generally include populations
such as retirees, disabled individuals, and low-income individuals who have no earnings. The 1975
legislation included direct payments to retirees receiving Social Security and Railroad Retirement. In
2009, direct payments were also made to retires, recipients of Supplemental Security Income (SSI), and
recipients of certain veterans' benefits.
Table 1 provides an overview of laws enacted since 1975 that provided for one-time payments to
individuals to address economic downturns.

      Table I. Selected Law Providing Direct Payments to Individuals: 1975 to Present
              Law                              Description                   CRS Products
 Tax Reduction Act of 1975 (P.L. 94-12)  Tax rebate: 10% of taxes paid in 1974. Maximum  CRS Report 92-20E
                                payment of $200 (phased down to $ 100 for higher  (available to
                                income taxpayers).                        congressional clients
                                                                          upon request).
                                Direct payment: $50 for Social Security and Railroad
                                Retirees and recipients of Supplemental Security
                                Income (SSI).


Congressional Research Service
  https://crsreports.congress.gov
                     IN11256


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