For the second year in a row, monthly Social Security and Supplemental Security Income benefits for more than 58 million Americans will not automatically increase in 2011, the Social Security Administration said Friday, but Congress will try to pass a law to provide seniors with the extra money anyway.
The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in the Consumer Price Index for urban wage earners and clerical workers from the third quarter of the last year that a cost-of-living adjustment was determined to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2008, the last year a COLA was determined, to the third quarter of 2010. Therefore, under existing law, there can be no COLA in 2011.
Other changes that would normally take effect based on changes in the national average wage index also will not take effect in January 2011. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax, as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2011. There was no COLA in 2010 either for the same reason.
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.
House Ways and Means Social Security Chairman Earl Pomeroy said Thursday that the House will take up the Seniors Protection Act when Congress reconvenes in November, should the Social Security Administration announce that no COLA would be payable to seniors in 2011. The Seniors Protection Act of 2010 will provide a $250 payment to about 54 million Social Security recipients.
Pomeroy introduced the bill, H.R. 5987, in July, and has since worked to ensure that the bill will be enacted before the end of the year. Pomeroy received assurances Thursday from Speaker of the House Nancy Pelosi, D-Calif., and Ways and Means Chairman Sander Levin, D-Mich., that the bill will be brought to the House floor and passed when the House reconvenes in November
Ive worked hard with my colleagues to make this bill a priority, and I am very pleased that we have received Speaker Pelosis commitment to bring this bill for a vote on the House floor, Pomeroy said in a statement. Seniors who rely on their modest Social Security payments need these cost-of-living-adjustments for their day-to-day survival.
Next year will be the second consecutive year that Social Security retirees, veterans, and people with disabilities will see no increase in their monthly Social Security, SSI, VA Pension and Compensation, and Railroad Retirement benefits.
