Social Security COLA

Changes Proposed To The Way Social Security Collects and Dispenses Funds

by Staff | November 3rd, 2014

When U.S. citizens are no longer able to work, many depend on Social Security Disability benefits for income. The problem is a lack of funding is causing a threat of benefit cuts for recipients.

Estimates show that Social Security Disability benefit payments could be slashed by as much as 23 percent by 2033. Those cuts could increase another 5 percent by 2088.

These potential cuts in benefits have prompted lawmakers to begin developing solutions. One proposal discussed inForbes magazine—called the Social Security 2100 Act—calls for three major changes to resolve the issue:

  1. Changes to Cost-of-Living-Adjustment (COLA) calculations– The current COLA calculation system uses the consumer price index to measure inflation on goods and services, which is in turn used to determine the annual COLA. The problem is this system measures inflation amongst the entire population, while most Social Security recipients are elderly. The act calls for a new inflation measurement method—called the Consumer Price Index for Elderly Consumers—that measures inflation in areas where the elderly spend most of their money.
  2. Increases in the threshold of income that is taxable for Social Security– The proposal calls for increases in the amount of income you can receive from the Social Security Administration that is considered taxable. New limits could be as much as $50,000 for a single individual or $100,000 for a couple.
  3. Increased Social Security Tax Rate– Currently, a taxation rate of 6.2 percent of earned income is established for Social Security. Social Security 2100 Act calls for that rate to be bumped to 7.2 percent by 2037.

At Fleschner, Stark, Tanoos & Newlin, our Social Security Disability Lawyers are hopeful solutions are found and implemented soon.

Changes Proposed To The Way Social Security Collects and Dispenses Funds

by Staff | November 3rd, 2014

When U.S. citizens are no longer able to work, many depend on Social Security Disability benefits for income. The problem is a lack of funding is causing a threat of benefit cuts for recipients.

Estimates show that Social Security Disability benefit payments could be slashed by as much as 23 percent by 2033. Those cuts could increase another 5 percent by 2088.

These potential cuts in benefits have prompted lawmakers to begin developing solutions. One proposal discussed in Forbes magazine—called the Social Security 2100 Act—calls for three major changes to resolve the issue:

    1. Changes to Cost-of-Living-Adjustment (COLA) calculations– The current COLA calculation system uses the consumer price index to measure inflation on goods and services, which is in turn used to determine the annual COLA. The problem is this system measures inflation amongst the entire population, while most Social Security recipients are elderly. The act calls for a new inflation measurement method—called the Consumer Price Index for Elderly Consumers—that measures inflation in areas where the elderly spend most of their money.
    2. Increases in the threshold of income that is taxable for Social Security– The proposal calls for increases in the amount of income you can receive from the Social Security Administration that is considered taxable. New limits could be as much as $50,000 for a single individual or $100,000 for a couple.
    3. Increased Social Security Tax Rate– Currently, a taxation rate of 6.2 percent of earned income is established for Social Security. Social Security 2100 Act calls for that rate to be bumped to 7.2 percent by 2037.

      At Fleschner, Stark, Tanoos & Newlin, our Social Security Disability Lawyers are hopeful solutions are found and implemented soon.

      Obama Continuing to Push Changes for Cost-of-Living Adjustment

      by Staff | February 21st, 2014

      February 21, 2014

      It can be a struggle to make ends meet for those who receive Social Security Disability Benefits as their only source of income. In an effort to help these individuals, the federal government offers a Social Security cost-of-living adjustment (COLA) to each beneficiary to offset the inflated costs of necessary goods and services. President Barack Obama is now pushing for reforms to this system that would significantly reduce the COLA claimants receive each year.

      A report from All Voices stated current laws use something called a Consumer Product Index (CPI) to determine the annual COLA amount for beneficiaries. This system examines the rise in costs of certain goods and services, then uses these numbers in an equation to determine how much each beneficiary should receive to offset these rises in cost.

      Under the chained CPI system President Obama is proposing, it is taken into consideration that when the cost of one good or service rises, Americans will seek a cheaper alternative. The lower costs of alternative products are then used to determine the annual COLA, thus lowering the increase in payments each claimant receives.

      The Social Security Disability Lawyers with Fleschner, Stark, Tanoos & Newlin recognize how complex the laws surrounding Social Security disability benefits can be. That’s why the firm encourages citizens to discuss their claim with a qualified attorney in order to help ensure they receive their maximum benefits.

      Social Security raises its benefits by 3.6 percent; for neediest seniors it may boost lifeline

      by Staff | October 28th, 2011

      The first cost-of-living adjustment (COLA) on Social Security checks in two years was announced this week, reports The Washington Post.

      For lower- and middle-class seniors, Social Security represents a staggering share of their income. For these older residents, medical bills, taxes, insurance, utilities, and groceries consume nearly all their income.

      Higher medical costs are a huge factor in this dwindling income. Some older citizens spend thousands per year on medical costs and hundreds per month on prescriptions. As a matter of fact, as much as one-fourth of the raises to Social Security beneficiaries could be wiped out by higher Medicare premiums.

      The Washington Post reports that among the bottom fifth of people 65 and older, Social Security represents 80 percent of income. For the middle tier, it makes up 65 percent. Among the top tier, it comprises less than 20 percent of their income.

      Starting in January, 55 million Social Security recipients will get an increase of about $39 a month. In December, more than 8 million who receive Supplemental Security Income, the disability program for the poor, will get an increase of about $18 a month.

      COLA is tied to an inflation measure released this past week. Because inflation was so low, the measure produced no raises in 2010 or 2011. Those were the first two years without a COLA raise since automatic increases were enacted in 1975.

      Read more.

      Do you think 3.6 percent is a sufficient COLA?

      If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.

      New Social Security COLA Not As Great As It Sounds

      by fst | October 26th, 2011

      October 26, 2011

      At first, many recipients of social security benefits were overjoyed when they learned that the Social Security Administration (SSA) had announced a 3.6 percent increase in payouts beginning next year as part of a cost of living adjustment (COLA). With an increase in Medicare costs though, and a bleak future for the social security program as a whole, many people are questioning if the increases will do any good.

      According to FOX 19 News, the 3.6 percent increase means an estimated $30 billion additional dollars will be paid out to the millions of retirees and beneficiaries in the country. This sounds like a big number, but only equivocates out to about an extra $39 per month for someone receiving social security checks, and only an additional $18 per month for those with Supplemental Security Income. While this seems great on the surface, the majority of this newly allotted money will be eaten up by the government’s increase to Medicare Premiums. This is not the only problem that has Americans casting shadows of doubt on the system.

      It has been estimated that the program may not have the budget to survive to the next generation of retirees without benefit cuts or tax increases. Also, higher unemployment rates in the country means that less people are paying into the system. In other words, the program is spending more money than it can bring in, and will eventually dry up.

      The Indiana Social Security Lawyers with Fleschner, Stark. Tanoos & Newlin want you to tell us your opinion on the Social Security payment increase by posting to our Facebook page.

      Seniors Will Get Cost-of-Living Adjustment from Social Security in 2010: Report

      by Staff | October 18th, 2011

      Senior citizens should enjoy a cost-of-living adjustment (COLA) from the Social Security Administration in January, according to Massachusetts nonprofit group American Institute for Economic Research (AIER). This will be the first time in two years that benefits recipients will get a COLA, which is designed to ensure that the agency’s benefits account for inflation.

      The Christian Science Monitor reports that prior to this two-year impasse on COLA, the rate had increased for beneficiaries every year since 1975. The Great Recession, however, lowered consumer prices so that COLA couldn’t increase.

      “It’s important to remember that the typical older American today lives on an income of roughly $20,000, and Social Security keeps nearly a third of older Americans out of poverty,” said Tiffany Lundquist, spokeswoman for the AARP. “After two years with no COLA and increasing costs for food, utilities and health care, every dollar of the modest average benefit of $14,000 is critical.”

      AIER estimates that the COLA will be somewhere between 3.5 and 3.7 percent. The exact adjustment is expected to be announced on Wednesday or soon thereafter when the U.S. Bureau of Labor Statistics issues its Consumer Price Index for Urban Wage Earners and Clerical Workers for September 2011.

      “The COLA index is based on average price of goods and services as consumed by workers, not by retired people,” AUER research fellow Polina Vlasenko told The Christian Science Monitor. “Retirees tend to spend more on health-care and goods and services, and those prices increase faster than the national average. So COLA may not fully compensate for what that they spend their money on. The index isn’t ideal for retired persons, but it is what it is.”

      Read more.

      Do you think the Social Security Administration’s COLA adjustment is high enough?

      If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.

      Social Security Advocates Fight Against COLA Cut Proposals

      by Staff | July 1st, 2011

      Plenty of Social Security advocates are up in arms over news that the Obama administration is considering switching to a “chained” Consumer Price Index when making cost-of-living adjustments (COLA) for Social Security beneficiaries, according to HuffingtonPost.com.

      The consideration comes as lawmakers debate about which budget cuts to make to keep the United States from exceeding the federal debt limit, which is set to occur the first week of August.

      As it stands, the Social Security Administration typically makes near-annual COLA adjustments.

      The Bureau of Labor Statistics explains that the chained CPI formula would estimate a lower cost-of-living for Social Security beneficiaries because it takes recessions into account, figuring that Americans buy less during tough economic periods.

      In a recent news release, Joan Entmacher, director of family economic security at the National Women’s Law Center, said, “The proposal to shift to the chained-CPI is actually a stealth attack on Social Security.”

      Likewise, a report from the Economic Policy Institute asserts that the chained CPI formula would be inappropriate for calculating Social Security COLAs because the 65-and-older population typically spend three times as much on healthcare than the general population.

      Read more.

      Do you think the chained-CPI would be a fair way to look at cost-of-living for Social Security beneficiaries? Do you think Social Security should be taken out of the debt ceiling reduction discussion?

      If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.