SOCIAL SECURITY LAW: No Increase in SS Monthly Benefits Seen
October 10, 2010
Washington – More than 58 million Social Security recipients will not receive an increase in monthly benefits yet, the second year that they will not receive automatic adjustments to their benefits, as federal government is set to make the announcement next week.
The cost of living adjustments (COLAs) are automatically set each year to make adjustment for inflation as adopted by the US Congress since the 70s. However, SSA trustees project that there will be no COLA until 2011.
The projection is often based on estimate which is released by the Bureau of Labor Statistics.
Under federal law, the SSA is required to base annual payment increase on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which also measures inflation. The number is compared to the inflation rate in the third quarter of each year, with the same months in the previous year.
If inflation increases from year to year, Social Security recipients automatically get higher payments, starting in January. If inflation is negative, the payments stay unchanged.
The announcement has raised concern for older Americans who have not had a raise since January 2009 and may not be getting any increase until at least January 2012. Nearly 64 percent of retirees rely on social security benefits as a primary source of income.
The largest increase in SS payments, which was 5.8 percent, was made in 2009, as a result of the rise in energy prices.
In Congress, Rep. Earl Pomeroy, (Dem-North Dakota), chairman of the Ways and Means subcommittee on Social Security, plans to introduce a new bill that will provide $250 payments to seniors if no increase in the SS benefits will be granted.