A 2018 Boost in SSD Payments – How Is It Determined?
November 13th, 2017 by Attorney John Colvin
The U.S. government informed Social Security recipients in October 2017 that they will see a 2% increase in benefits for 2018. This is the largest increase in the last five years, but experts say that the larger increase will be eaten up by higher premiums for Medicare.
While it amounts to only approximately $25 per month for the average recipient, this cost-of-living adjustment (COLA) will apply to nearly 70 million Americans.
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How Is the Cost-Of-Living Adjustment Determined?
COLA is determined by measuring a wide variety of consumer prices that are recorded by the Bureau of Labor Statistics (BLS). This is done annually and is based upon the CPI (Consumer Price Index) for Urban Wage Earners and Clerical Workers. COLA measures changes in prices for the following:
- Medical care
The formula for determining Social Security benefits does not fully capture the increased prices that many elderly people face, especially healthcare and prescription drug costs. Advocates for the elderly say this means that many senior citizens do not have enough to cover basic needs.
Congress enacted automatic increases for Social Security payments in 1975.
Presidents frequently get blamed when the increase in payments is negligible; however, presidents do not possess the power to increase SS payments, other than by lobbying Congress to change federal law. President Obama, however, did get Congress to approve a single payment of $250 to SS recipients in 2009 in the wake of the economic downturn.
On the other hand, conservatives on the issue state that the inflation index is actually too generous. They argue that, as prices increase, some seniors will opt for cheaper alternatives.
Consumer Prices Increased Slightly
BLS reported that consumer prices increased just slightly in the last year, despite the fact that gasoline prices lurched higher after two back-to-back hurricanes squeezed oil production in the Gulf of Mexico.
For the typical retiree who gets a monthly Social Security check of $1,360, a 2% increase will mean an increase of $27.20. But for most recipients, Medicare Part B premiums come out of Social Security, which are slated to rise. So, in reality, many seniors will see little increase.
Average COLA Increases Meager in Recent Times
Since 2008, the COLA has averaged approximately 1% per year. In the previous decade, the increase was 3% per year on average. In the last year, the cost of medical care went up by 1.5%, and housing prices have surged by 2.8%. Food and beverages saw an increase of 1.2%, and gas prices are approximately 10% higher.
There is no doubt that people who rely on Social Security alone are facing an economic challenge. For those who are waiting for the Social Security Administration to decide about their disability case, it is even worse.
Denied SSDI? Contact Social Security Disability Attorney Today
For more than 20 years, Social Security disability attorney John R. Colvin has been assisting people in Tennessee to get Social Security disability benefits. If you have questions about your SSDI case, please contact John at (931) 962-1044, or submit a query on our online form. Put John R. Colvin’s bold and client-focused approach to work on your SSDI case.