Thousands of Americans to Get $500 Monthly Payments Under New Plan

Americans could earn $500 no-strings-attached monthly payments if a new proposal makes its way through Congress.

Democratic Representatives Adam Schiff of California and Bonnie Watson Coleman of New Jersey proposed the Guaranteed Additional Income for Families in Need (GAIN) Act, which would offer the $500 monthly checks for five years to select low-income Americans.

To qualify, you’d need to be on Medicaid but could then use the guaranteed income on anything you choose, no strings attached.

“With hard-working families struggling to make ends meet, we’re seeing a rise in negative health outcomes, from cardiovascular disease and depression, to anxiety and cognitive decline,” Schiff said in a statement.

“Guaranteed income may be a powerful and cost effective way to provide stability and support for those who need it most. That’s why I’m proposing a first-of-its-kind, targeted pilot program to help determine if we can improve outcomes with guaranteed income.”

Recent studies show that direct cash assistance is linked to lower poverty rates and better economic outcomes, Watson Coleman said.

“The targeted distribution laid out in the GAIN Act makes sure those who need support can get it,” she said. “Direct aid pilot programs have shown that most people spend the additional income on child care, food, and rent, freeing up families to actually escape the cycle of poverty.”

The federal program models several local and state models for guaranteed income programs, including those in Stockton and Long Beach, California.

“Across our coalition, we’re seeing that when you give folks a guaranteed income, productivity goes up, stress goes down, and the general well-being of our communities improves,” Mayors for a Guaranteed Income Founder and former Stockton Mayor Michael Tubbs said. “Nobody’s health outcomes should deteriorate because they aren’t able to pay the bills, and Representative Schiff’s bill would be a major step forward in achieving that goal.”

Under the GAIN program, there would also be an established 10 guaranteed income programs within cities and states across the United States, and each participating Medicaid beneficiary would get at least $500 monthly for a total of five years.

Medicaid beneficiaries must meet certain low-income requirements in order to get the federal health insurance, and the program already serves some of the most financially vulnerable Americans.

During this time, the lawmakers said, authorities would record how the cash payments impact health outcomes in recipients so they can use the data for the future.

“We’ve already seen in multiple cities how small, target programs with guaranteed income have been highly effective in pulling the families receiving funding out of poverty,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

“This law would give the go-ahead for other cities and states to launch similar pilot programs and see if the effects would be as beneficial as they’ve been for others that have received assistance. The extra $500 a month recipients could gain would go a long way with helping with daily expenses, especially with inflation playing such a challenging role for many in our current economy.”

The federal program would mirror a guaranteed income option in Fresno County, California, which similarly sees $500 checks go out monthly to low-income residents. To qualify, you must have young children in the household and be living in southwest Fresno or Huron. The application window closed on May 15, but the county said recipients can expect the first check to go out this month.

“Even modest cash infusions can transform lives,” Michael Ryan, a finance expert and the founder of michaelryanmoney.com, previously told Newsweek. “Helping people with financial resources can have a ripple effect, often contributing to economic mobility, educational attainment and overall community well-being. It’s like throwing a pebble into a pond, but instead of ripples, you get positive change.”

Still, Beene said odds aren’t high that the new law will actually make its way through Congress.

“Congress learned during the pandemic offering financial incentives to Americans was highly popular, but many legislators still have a difficult time endorsing any measure that provides money to families with the stigmas that go along with guaranteed income attached to it,” Beene said.

“At the end of the day, many still see it as giving away money with no requirements, and as long as that perception is out there, it’s going to be hard to find widespread support.”