Updates – See here for the latest COLA increases by year
The Social Security Administration has officially released the Social Security and SSI information against the background announcement that there will be no cost-of-living adjustment (COLA) increase next year. The zero COLA adjustment means the monthly Social Security and Supplemental Security Income (SSI) benefits will not automatically increase in 2011. Approximately 60 million Americans who receive some form of SSI will be impacted by this change. Of this group, 65% relied on the SSI benefit as their primary source of income, with the the average Social Security benefits payment worth $1,072 a month. The monthly maximum Federal SSI amounts for 2011 are $674 for an eligible individual and $1,011 for an eligible individual with an eligible spouse.
Since there is no COLA, the social security law prohibits a change in the maximum amount of earnings ($106,800) subject to the Social Security tax as well as the retirement earnings test exempt amounts. This is reflected in the table below where 2010 levels remain unchanged into 2011:
Will there be a one-time bonus social security supplement payment?
In response to the lack of a COLA increase the White House has stepped up pressure on Congress to provide another one-time SSI payment to help the millions of senior citizens who are already furious for not having received the promised 2010 payment. This is a particularly thorny issue for politicians in an election year, already facing issues like expiring bush tax cuts and a mounting federal deficit.
Fortunately, Ways and Means Social Security Chairman Earl Pomeroy recently announced that the House will take up the Seniors Protection Act when Congress reconvenes later this year. The Seniors Protection Act of 2010 (H.R. 5987) will provide a $250 payment to qualified Social Security recipients. Congressman Pomeroy received assurances today from Speaker of the House Nancy Pelosi, and Ways and Means Chairman Sander Levin that this bill will be brought to the House floor and passed when the House reconvenes in November
Medicare Premium change
Another impacted issue with the lack of a COLA increase are Medicare premium changes in 2011. The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2011. Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects more than 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2011. In addition, almost 20 percent of beneficiaries have their Medicare Part B premiums paid by state medical assistance programs and thus will see no change in their Social Security benefit. The state will be required to pay any Medicare Part B premium increase.