THE

NYC
AID
PLAN
ERIC ADAMS 2021
THE NYC AID PLAN
(ADVANCED INCOME DEPLOYMENT)
New Yorkers are in crisis because of COVID-19--and they need immediate, serious
financial assistance to get through. Unfortunately, much of the assistance that
New Yorkers qualify for is significantly delayed because it is tied to federal and
local tax credits that are paid out just once a year.

To get New Yorkers the money they need right now, Eric Adams proposes the NYC
AID (Advanced Income Deployment) initiative to get struggling individuals and
families their Earned Income Tax Credits (EITC) in advanced monthly payments,
while also substantially increasing the amounts of the credits to deliver the high
level of aid needed during our financial crisis.

Under Adams’ plan, a New York City family with two children on the edge of
poverty earning $30,000 a year would receive approximately $3,000 annually, or
about $250 a month from a boosted City EITC program. Currently, that same
family would receive about $250 for the entire year from those same credits.

Credits would be paid out monthly as an advance by the City on qualifying New
Yorkers’ past annual earnings. A safe harbor provision would also be added so
that any increase in earnings over the year of monthly benefits would not affect
pay out. A pilot in Chicago and a federal program that was in place from 1979 to
2010 both showed that this method of advanced payments were feasible,
economical, and ultimately successful in reducing poverty and improving
outcomes for recipients.

HOW DOES IT WORK?

Adams would provide new substantial, dependable income by changing the
current City tax credit system by: 1) Increasing the City’s EITC match from 5% of
the federal credit to 60% for those New Yorkers and households earning $30,000
a year and less; 2) Increasing the City’s EITC match to 30% for those earning
between $30,000 and $50,000; and 3) paying advance monthly checks to
qualifying recipients based on their earnings from the previous tax year, not in
lump sums at the end of the tax year.

While the AID program would provide the most significant support for
lower-income New Yorkers who are in serious danger, Adams’ plan would also
reach out to catch the large number of middle-income New Yorkers who are now
suddenly on the edge, and could easily fall into poverty. That part of the plan is
essential because the last 12 months of income for so many New Yorkers does not
necessarily reflect their current financial circumstances.
For instance, a couple with one child may have depended on one source of
income that put them in the “middle class” earning $50,000 a year, but now both
adults are unemployed and facing eviction and debt as savings evaporate. That
couple’s income for the last year looks adequate on paper, but it does not reflect
their financial situation. This would allow AID to cover nearly 900,000 New Yorkers.
The total amount advanced per household would reach up to $4,000 over 12
months for lower-income families with children.

Because the boosted EITC match would be based on an existing City program
that is pegged to a federal program, it is also unlikely the increase in assistance
would affect New Yorkers’ access to other government benefits.

FAMILY OF 4 EARNING $3,000

$30K WOULD RECEIVE ANNUALLY

HOW IS IT ADMINISTERED?
The NYC AID plan would also mandate payments be distributed via either direct
deposit or a prepaid debit card so that predatory lenders and check-cashers do
not take advantage of New Yorkers. To make this possible, Adams would also
immediately initiate his local banking network proposal, working with small and
large banks to set up free checking accounts for any New Yorker who needs one,
giving them access to financial tools that can help them manage their money and
build wealth.

And when eligible recipients are signed up for the AID program, they will
immediately be connected with HRA case workers who will use their AID
information to connect them to a much broader range of local, State and federal
benefits to ensure our residents are getting every benefit they qualify for--and
that the City is getting back every dollar it sends to Albany and Washington, D.C.

HOW DO WE PAY FOR IT?

Increasing these credits for struggling New Yorkers would cost approximately $1
billion. New costs for administrative fees would be low. Colorado estimated that
the cost per participant in an advanced income program would be about $4.50.
But the cost of doing nothing is likely higher because so many New Yorkers are at
risk of falling into poverty and so would require public assistance for much longer
without immediate assistance. Studies show that some amount of dependable
advanced income for struggling households -- that can be counted on monthly
to keep finances afloat and afford childcare -- allows recipients more time to
focus on finding a job, starting a new business, or learning skills that can help
them become employed. The aid would also likely be immediately recirculated in
the local economy, since recipients of advanced income tend to spend it on basic
goods and services.

Even so, it would be irresponsible for any new City initiative with a price tag to
come without a payment plan--especially when the City faces large out-year
budget deficits. Adams has already proposed a three-part plan for closing the
projected City budget deficit, including 3-5% cuts across the board to City
agencies, attrition of non-essential City workers, and a modest increase to the
City income tax on ultra-millionaires.

Combined, those actions are projected to save or create $5-6.5 billion in the first
year, increasing year-over year as headcount drops and further agency savings are
found. Even with projected deficits and without depending on expected new
stimulus from Washington, that savings and revenue will cover the gap and
advanced increased credits payments to struggling New Yorkers.

FAST FACTS ON NYC AID:

NYC Earned Income Tax Credit match would increase from 5% to 60%
60% for individuals and households earning $30,000 in annual income and
less.

NYC Earned Income Tax Credit match would increase from 5% to 30%
30% for individuals and households earning between $30,000 and $50,000
in annual income.

Payments would be made monthly via direct deposit or a prepaid

debit card.

All recipients would be automatically signed up for a bank account that

can help them build wealth and save money.

EITC ELIGIBILITY
Married with qualifying children - Earning up to $55,952
Married with no qualifying children - Earning up to $21,370
Single with qualifying children - Earning up to $50,162
Single with no qualifying children - Earning up to $15,570