Why was the Postal Service’s net income in FY 2022 so high?
The Postal Service’s net income (revenue minus expenses) was $56.0 billion in fiscal year (FY) 2022. That’s almost as much as the Postal Service earns in revenue in a year. What’s going on?
The reported higher income reflects the provisions of the Postal Service Reform Act of 2022 (PSRA), which became law in April. The PSRA removed the Postal Service’s responsibility for $57.0 billion in past due prefunding payments for retiree health benefits. The Postal Service has failed to make these payments since 2012.
These missed payments showed up as expenses on the Postal Service’s financial statements in the past. Now that the payments are no longer past due, the Postal Service reversed all the past expenses for the unpaid amounts on its books, leading to an extremely high reported net income for FY 2022.
Does this mean USPS is suddenly flush with cash? No. The change does not mean the Postal Service has more money on hand. The Postal Service did not make the payments in the past, and it is not getting any cash now that the obligation is removed.