Social Security beneficiaries will see no increase in their benefit checks next year, the federal government said on Friday. For more than 58 million seniors and other Social Security beneficiaries, 2011 will mark the second in a row without an inflation adjustment.
Inflation has been low in the past two years because of the recession. The Bureau of Labor Statistics on Friday morning reported prices were up only slightly over last year.
The last Social Security inflation adjustment was in 2009: Beneficiaries got a higher-than-normal 5.8% increase because of a temporary spike in energy prices in the third quarter of 2008.
Soon after, however, energy prices plummeted. Then the bottom fell out of the economy and by the third quarter of 2009 overall price levels had fallen 2.1% from the same period a year earlier. That meant no increase in 2010 Social Security benefit checks.
This year, while there has been some inflation, prices remain lower than they were in the third quarter of 2008 — and that’s the quarter that counts. By law, the Social Security Administration is required to track inflation using the most recent third quarter that led to an adjustment. So the 2011 decision is based on the change in inflation between the third quarter of 2008 and the third quarter of 2010.
The finance and economics blog Calculated Risk noted recently that even though retirees will go two years without an increase, “those receiving benefits are still ahead because of the huge increase 1/8 they got in 2009 3/8 .“
Even if that is correct mathematically, the idea of another year without a pay hike isn’t likely to be popular with the people who receive Social Security retirement, disability or supplemental income benefits.
“ 1/8 T 3/8 he average senior can still expect to see 27% of his/her Social Security check eaten away by Medicare premiums and out-of-pocket costs next year,“ said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.
There is, however, a “hold harmless“ provision that protects more than 70% of beneficiaries from having to pay higher Part B Medicare premiums, should they increase, the Social Security Administration said.
The Obama administration made a failed push last year to offer $250 payments to Social Security recipients to compensate for the lack of a COLA and to serve as economic stimulus. Such a move would have cost roughly $14 billion.
This year, House Democrats have said they will try to push a similar measure when Congress reconvenes after the mid-term elections in November.
Critics of the extra payments have pointed out that Social Security benefits are intended to maintain purchasing power — which by the inflation measures used they have. And, they noted, benefits don’t decline when prices decline, which happened in 2009.
For high-income Americans still in the labor force, there’s a bit of bright news: Since there is no COLA for 2011, there will also be no increase in the amount of earnings subject to the Social Security tax, which is currently assessed on the first $106,800 of a person’s wages.
If the inflation rate is low, then why in the world would the payments increase? Why is this a big news story????
i cant understand why we dont get a raise and we all dont get 1060 or the 1200 range for i myself get a smaller amount and worked up until i couldnt work any more but yet everybody in these big companies as ceo and in goverment all get raises taking the poors money and giving to the rich theres some people paid in and passed away before even seeing a dime of the money they paid in i wish we could live in the whitehouse and then we wouldnt have to worry about money or bills or losing everything we got for its either eat or pay bills why do you think we have so many people homeless and draw ss they cant afford a place to live and all the bills that comes with it
i cant understand why we dont get a raise and we all dont get 1060 or the 1200 range for i myself get a smaller amount and worked up until i couldnt work any more but yet everybody in these big companies as ceo and in goverment all get raises taking the poors money and giving to the rich theres some people paid in and passed away before even seeing a dime of the money they paid in i wish we could live in the whitehouse and then we wouldnt have to worry about money or bills or losing everything we got for its either eat or pay bills why do you think we have so many people homeless and draw ss they cant afford a place to live and all the bills that comes with it
I am on disabilty.It would be great if I drew over $1,000.00 a month.Stop your belly aching Betty Dizik. I draw no way near what you draw a month. I live below poverty level.I have to ration the use of my car because gas is so high. I can’t eat in a healthy manner because I can’t afford a $2.79 apple…one apple @ $2.79 each! I shop for food once a month. I’m so tired of hamburger & canned vegatables. But somehow I feel blessed.It could be worse. So enjoy your $1,200.00 a month SS chec,while I manage to live on less than half what you live on.
Enjoy your day Betty,
K.K.
JUST ANOTHER REASON WHY WE SHOULD VOTE ALL INCUMBANTS OUT OF OFFICE AND START WITH A NEW CONGRESS THEY HAVE RUINED THE COUNTRY,PEOPLE HAVE LOST JOBS AND HOMES, PRICES ARE OUTRAGIOUS, THEY GIVE THEMSELFS RAISES BUT WE CANNOT GET A LOUSY $20.00 A MO. INCREASE, WAIT TILL ELECTION DAY, JUST WAIT
I keep reading about how these government officials are voting our lives away when they don’t even have to pay social security much less ever have to live on it. They will always get the same salary they get now and never pay in. They live in their cozy expensive homes while we on social security can’t scrape by and make it through the month. I also only hear about retirees who are getting over a thousand dollars a month. I am only getting $777. and so are several others that I know who are not elderly. Just because we aren’t elderly and haven’t been able to work all our lives doesn’t mean we don’t count. We can’t control the fact that we cannot work anymore because we have become disabled, or that social security only gives us the (as they call it) “minimum payment” each month. Take a good look at what it costs to rent an apartment these days and what utilities cost, then the fact that we are now required by law to carry auto insurance when we can’t even make it as it is. Those of us who are younger and disabled, only getting in the area of $700 or so should count and be heard too. Do we not matter? Or is it just the seniors (not to take away from them, they count too, but so do we). No one mentions us, we’re swept under the rug.
No inflation? Then why is it that my basic cost of living expenses go up and never down. Each year my health insurance premiums go up, my fees for my apartment go up, food prices increase (and never go back down), the cost of my transportation (mostly public) increases…well, you get the idea.
I honestly believe the measure of living expenses is skewed to make things appear better than they are. On top of that, what modest savings I have pay essentially nothing, so I can’t even benefit from saving.
Something’s wrong with this entire picture.
Sorry to those living on SSI that don’t get raises, but guess what, those of us that are paying for it didn’t get raises either. It is a down economy and we ALL have to make sacrifices – including those that are living on SSI. If you get a “raise”, where do you think that money is going to come from. The system is already going broke – do you just want to make sure you get yours before the end, leaving a bigger bill and nothing left for the kids of today. Quit being selfish.
You could be getting pay cuts — ACTUAL cuts like my company is doing…..
Social Security is supplemental income to what you should have saved to fund your retirement. It’s not a pension.