Economy

Social Security COLA Inadequate For COVID-Ravaged Seniors

Social Security COLA Inadequate For COVID-Ravaged Seniors”

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the Social Security Administration announced Tuesday. Just the previous month, the Senior Citizens League- an advocacy nonpartisan group that is dedicated towards older Americans- predicted a boost of 1.3%, based on the consumer price index data. Seniors living on fixed incomes need a lifeboat; this COLA increase is more like an underinflated inner tube.

Next year's increase will be the lowest since 2017. It sought to address the long-range problem of economic security for the aged through a contributory system in which the workers themselves contributed to their own future retirement benefit through FICA taxes by making regular payments into a joint fund. In another adjustment for next year, the maximum amount of earnings subject to Social Security payroll taxes will rise to $142,800 from $137,700.

The Social Security Act provides for how the COLA is calculated. The Medicare Part B premium of those individuals is reduced to prevent their net Social Security benefits from being lower than the year before.

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Social Security beneficiaries on Medicare, will not know their new amount until after the 2021 Medicare premiums are announced.

Larson supports passage of the Social Security 2100 Act, under which annual increases would instead be based on a "Consumer Price Index for the Elderly" that better reflects the amount seniors pay for certain necessities. That prompted Congress to pass recent election-year legislation that limits next year's premium increase but gradually collects the full amount later on under a repayment mechanism. With automatic 3% raises between 2010 and 2020, beneficiaries would have received an extra $18,000.

"COLAs have never remained so low, for such an extended period of time, in the history of Social Security", Johnson said in a statement. Congress introduced automatic annual COLAs to the program in 1975.



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