Update: Unfortunately, as of March 2017, there has been no word of the proposed one-time payment to make up for the small 2017 COLA. This is the second year in a row that seniors have received no increase or a very small increase in Social Security benefits. Twice, members of Congress proposed a one-time payment to help gap the low or no-COLA. Unfortunately, neither bill passed. The COLA is expected to be higher next year as inflation is on the rise.
New York Senator Chuck Schumer says that Congress should send a one-time emergency payment of $581 to all Social Security recipients to make up for the tiny cost of living adjustment (COLA) scheduled for 2017 and the fact that there was no COLA in 2016.
Small Social Security Increase for 2017
The Social Security Administration recently announced that people who receive Social Security will only see a 0.3% increase in their benefits in 2017. This follows a 0% COLA in 2016. For most people the 0.3% increase will result in only about an extra $5 per month.
The purpose of the annual COLA is to help seniors keep up with rising costs. The average increase over the past two decades has been 2.4%; however, with lower oil prices and inflation, recent years’ COLAs have been much smaller.
Two-thirds of seniors rely on Social Security for over half of their income. A 0.3% COLA when the cost of food, housing and medicine is rising at a faster rate results in a benefit decrease for Americans who rely on Social Security for their main income.
The $581 one-time payment would pay for the equivalent of three months of groceries or one year of out of pocket prescription drugs for the average senior.
The SAVE Benefits Act
The Seniors and Veterans Emergency Benefits Act (SAVE Benefits Act) was introduced by Senator Elizabeth Warren last year when the Social Security Administration announced that there would be no COLA for 2016. The bill didn’t pass last year, but has been resurrected after the recent 2017 COLA was announced. The bill is being co-sponsored by Sen. Charles E. Schumer, Sen. Bernie Sanders and 15 other senators.
Congress passed a similar one-time payment in 2009, giving Social Security recipients a $250 payment to help during the recession. This was after it was announced that there would be no COLA for 2010 (there was no COLA for 2011 either, but the one-time payment only passed for 2010).
Why Social Security Isn’t Keeping Up With Retiree Costs
For many retirees, Social Security makes up the majority of their income. So it’s important for their benefit to keep up with the rising cost of living. Even though Social Security is adjusted for inflation each year, the increase in benefits is usually less than the increase in living expenses. This is because the SSA uses the CPI-W to calculate the COLA, which reflects the expenses of working individuals. A better index to use would be the CPI-E which tracks expenses that are more common to retirees, such as food, housing and health care. Click here to continue reading ‘Why Social Security Isn’t Keeping up With Retiree Costs’.
Changing How the COLA is Calculated
While the one-time payment would help, Congress would do better by changing how the COLA is calculated. The annual increase for Social Security benefits is based on the Consumer Price Index for Urban Wage Earners (CPI-W), which is based largely on transportation costs. Since oil and gas prices have been so low, this results is a low CPI and thus a lower COLA.
Unfortunately, the CPI-W isn’t an accurate reflection of the average senior’s budget. Most seniors have very low transportation costs as they don’t have to commute to a job any longer. However, these lower transportation costs are offset by higher food, housing and medical costs. A better representation of senior’s spending is the Consumer Price Index for the Elderly (CPI-E), which reduces the emphasis on transportation costs and gives greater weight to housing, food and health care.
Medicare Part B Expected to Go Up in 2017
While the Medicare premiums for 2017 haven’t been announced yet, they are expected to go up in 2017. As a result, many Social Security recipients will not receive an increase in their Social Security benefits as the annual COLA will be offset by higher Medicare premiums.
The only good news is that people who are already receiving Social Security can’t have their benefits reduced by rising Medicare premiums. This is known as the “hold-harmless” rule.
Social Security Wage Base Increases by 7.3% for 2017
In other Social Security news, the maximum taxable earnings for Social Security was increased from $118,500 (the 2015 and 2016 income limits) to $127,200 for 2017. At 7.3%, this is one of the largest increases in the Social Security wage base. This should result in a significant increase in Social Security taxes collected which will help reduce the deficit over the next few years.
This could be just the beginning for wage base increases. Polls show that 80% of Americans are in favor of increasing the amount of wages that people pay Social Security taxes on. Some proposals include raising the taxable maximum wages to $250,000, while others propose eliminating the cap completely.
Izora S says
I absolutely think we deserve a raise in Social Security, we have paid into SS our whole working life, this is our money and our government should never be allowed to touch this money. As we get older we are not able to work but sometimes we must to be able to pay our bills, and our insurance is always going up and Medicare and our medical needs…we deserve a raise, if we can give free everything to the people coming into our country then why can’t we at least get the help that we need to live at least as good as these people do…
Joyce S says
This is good news. That extra money would do a lot to buy groceries and get ahead. It will be nice to not worry if you can make it month to month. Looking forward to the extra income.
Cathleeniacono says
Why is it that the house members can’t see the need for a substantial raise? Nothing last year and a crumb this year… it doesn’t make sense to get a raise that amounts to 2 loafs of bread… we can’t live like this.. one other point I live in senior housing and about half of the people don’t even drive a car… with insurance payments going up copayments impossible to pay… help us in the future to get a better raise that can really help… seniors need assistance in paying all the high cost of living… thanks for reading this.
Lillian says
Those of us that are in our 80s did not make as much money as the younger people, did we should get a bigger raise.
Warren W says
We get practicly nothing but Obama wants a increase in his pension, how sorry has this Nation become.
Robert B says
Why isn’t someone going after the government to repay the millions of dollars barrowed from SS? That alone would pay for COLA increases for years to come. It is imperative that SS payments to retirees keep up with inflation!!!
Gerald says
Send check to [address removed for privacy]. Cost of living raise is appreciated.
Thanks,
Gerald
Nola S says
I wish social security would go up and we would get a good raise.
Bill D says
I never received a one time payment on my SS in 2009
kristine says
Bill – Recipients of Social Security benefits, Railroad Retirement benefits, Supplemental Security Income (SSI) payments, as well as recipients of pension and disability benefits from the Veterans’ Administration, received a one-time $250 payment in 2009. People who receive their benefits electronically would have received this payment electronically as well. Others should have received a check. People who qualified should have received the $250 Economic Recovery Payment no later than June 17, 2009. To find out if you received the economic recovery payment, call the Social Security Administration at 800-772-1213. General ERP inquiries can be answered by the SSA Web site: http://www.ssa.gov/recovery.
Leonaed S says
I don’t drive, I’m near blind. Can’t see to work, can’t live on 949/month. Damn shame…
Mary l says
Yes they should send us a one-time payment, we scrape and scrimp on the little money we have….
Marilyn S says
I think we should get a one time payment. It gets harder and harder to make ends meet. Groceries and medicine costs go up and you think “which do I choose?”.
Jo Lynn says
Social Security is 100% of my income and it gets harder every year!
Jean R says
We could surely use this check from Social Security! My rent jumped $60 a month and everything else went up! Like so many others I am only trying to keep my head above water!
Jeffrey S says
We need a raise and that single payment of 500 something dollars to make ends meet.
Linda J says
Send it soon.
Nan says
I feel we really deserve a wage increase. Everyone else in the government gets a yearly raise so we on Social Security should have one. Thank you.
Elsie M says
I live on SS, I was disabled ten years ago due to health reasons. My SS is only 728.00 a month, I get no other payments like retirement from anywhere. This little bit of money isn’t going to help that much. I live in Michigan where auto insurance is the highest for no coverage on my own car just other person. Well over a hundred a month. We really need a bigger raise food has gotten so high and the food stamps here in Michigan has been cut twice since March. Have 3.50 a day for food can’t get what we need to be eating healthy. Some days just a couple pieces of toast. And I know I’m not the only person that has to live like this. Thank you for the opportunity to express myself.
Louise W says
I agree what everyone has stated. I live only on my social security check. Everything is going up and not for us seniors. It is a dirty shame that we are put to the side. That check would sure help. Please consider us seniors.
Cindy says
If President Obama is giving himself and the former Preaidents an 18% raise, why shouldn’t Social Security be given a raise as well?
Carolyn says
I live on ssi, I am handicapped have been since birth. I started getting ssi when I was in my 20’s and I have raised 5 kids I’m still raising my 2 youngest. The increase would help me out a lot.
Dorothy K says
Our government is giving the refugees almost $1700 a month free. They never paid anything in but are given free medical also. We as tax payers over our working years should now be paid back. Shame on our Government.
Michael C says
The one time payment sounds good, but then they gonna raise your medicare premiums, so you don’t gain nothing. The over all COLA, economical over all for 2016 was 2.9%, for 2017, and they want to give us Seniors only 0.02% COLA, there is something BIG wrong with that picture? I feel that if the President, Senate, House, and Congress, and Judges, when they leave office, they SHOULD NOT get the same earning as if they were in office, ‘THAT’S WRONG’ people! They should flow back into the system that we are in, but no one is talking about this? Neither Trump nor Clinton is talking about us Seniors, cause they know they are doing us wrong, but then they want us to VOTE for them, WHY SHOULD WE, wake up America.
Gwen W says
I think the small 0.3 % raise is a slap in the faces of seniors. And what really makes me furious is Obama wants an 18% raise on his money.
Joyce says
Just need my money
Cheryl says
Yes absolutely ! It is hard to live on $833.00 a month. Let’s see some of the politicians live on that little.
Shirley V says
Yes! it is time for a raise for us on Social Security. It is awful all of the one’s liked Hillary Clinton and the one’s working in the White House to be so Crooked, that they can get any thing they want and we Middle Class and Poor People just get by. Medical Bills, Groceries etc. Every thing is costing. I don’t have any little children and young people get what they need it the way of food health wise that they need. Over the years my Husband at one time had three Jobs and I was working to make ends meet with just two children. I don’t see how this young generation get even by, with Children.
This COUNTRY has been in a mess for along time That is why it is so much DRUGS, and Divorce in families broken apart. Young and Old are homeless. Suicides and Murder. I hate to even watch the News. Please God help this Country and all the People. We do not need the Clinton’s are Obama close to the WHITE HOUSE!!! Go VOTE FOR DONALD TRUMP.
Shirley N says
We certainly should get this check. After all Social Security is our money. I wonder what anyone else would do if they only got a $4 raise in 2 years!! And again, THIS IS OUR MONEY!!
Lisa says
I only get 596 to live on a month I can’t afford Medicare premiums so I don’t get Medicare. It’s a choice between having a place to live or Medicare for medical, I have no choice but to pay my rent.
Marta F says
Since the election is over does it mean this one-time payment isn’t going to happen ? Has anyone heard anymore about it ?
kristine says
Thank you for your question Marta. Unfortunately, there has been no more discussion about the one-time payment since the election. Even though Trump pledged not to cut Social Security, his recent nominees (the secretaries of labor, the Treasury and health and human services) are in favor of cutting benefits. I’d be happy to be proven wrong, but it looks unlikely that a one-time payment will be pushed through with the new administration.
Leona Smith says
A raise would really be nice. I cannot keep my bills paid with what I get a month. There is no way a person can live on what a lot of us make. Congress would not live on it WITHOUT complaining.
Earnestine Hardeman says
If seniors stop voting for these people who don’t push harder for a SS raise maybe then they will take action.
David says
I got a raise this year then they took it away because Medicare got a raise which was all I got then my supliment went up and prescription plan went up so now I don’t get what I was getting if that’s what a raise does for you then I don’t want any more raises I didn’t get very much the way it was now I have less money the people that’s come over here get about $550 more than I do and food stamps a place to live and I have paid in to SSI 53 years