Yet again, no Social Security COLA

Since 1975 when The legislature instituted the cost of living adjustment (COLA) for Social Security payments, only once has there failed to be an increase. That had been this year. And as the Associated Press accounts, 2011 could be another non-COLA year for Social Security. The Social Security Administration blames the lack of a COLA on inflation rates being too low.

Congress functioning to make up for insufficient Social Security COLA

More than 58 million American retirees and disabled individuals depend on Social Security, and all of them look forward to the annual COLA. Each Social Security recipient would get $250 with the bill that the House of Representatives will be voting on in November as this is the second year that there hasn’t been a raise in benefits. The bill will go via the House fast if House Speaker Nancy Pelosi gets her way. Of course, the Senate is quite opposed to the bill, accounts the AP. Such news will no doubt add to the already heavy burden many retired Americans carry. COLAs aren’t taking place which is bad since the cost of living is increasing while savings and home values are really reduced.

83 years old retiree Betty Dizik told the AP, “We’re a little bit upset because our bills are going up and our Social Security isn’t really,” apparently. Dizik’s only source of income is a $1,200 month Social Security check. Her situation is not unique. It’s just like everyone else’s. $1,072 a month is the average amount a Social Security check brings in. In 2008, 64 percent of those getting Social Security reported it to be their only income, according to the Social Security Administration.

Last time there had been a Social Security COLA, it was huge

Workers and employees pay a 6.2 percent payroll tax right now for Social Security. The maximum wage cap for which the tax nevertheless applies is $106,800. The largest increase in 27 years had been done in January 2009 with a 5.8 percent boost. This had been, according to the AP, the last Social Security COLA. The really large COLA only happened because there had been a rise in energy prices.

Consumer prices have to rise above 2008 amounts before a COLA can happen for Social Security. The Social Security Administration has already planned for this. It plans on a 1.2 percent COLA in 2011 that would not start until 2012 in January.

Citations

Associated Press

msnbc.msn.com/id/39684354/ns/business-eye_on_the_economy/