Social Security increase: Seniors could get more money under new plan
Social Security recipients could see an increase in monthly benefits under a new proposal that would change how the yearly Cost-of-Living-Adjustment, or COLA, is calculated.
Rep. Ruben Gallego, D-Arizona, has introduced the Boosting Benefits and COLAs for Seniors Act in the U.S. House. The bill requires the use of the Consumer Price Index for Americans 62 years of age and older to set the yearly COLA change. Currently, COLA benefits are adjusted using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
COLA was first instituted in 1975 and is determined by data from the third quarter – July, August and September – of each year. This year’s COLA was 3.2%, less than half the historic 8.2% boost recipients received the year before. The 3.2% COLA represented an increase of $50 per month for the average recipient.
The CPI-W has long been targeted by senior advocacy groups that said it doesn’t paint an accurate picture of yearly expenses.
“The current COLA formula doesn’t accurately account for the inflation seniors face, especially in health care,” Roman Ulman, president of AFSCME Arizona Retirees Chapter 97, said in a statement. “It’s important that the COLA reflects how inflation impacts seniors so that we can pay our bills and our monthly Social Security checks stay strong.”
The CPI-E inflation gauge would more accurately reflect the costs incurred by older adults, especially related to health care food and housing, Ulman added.
Gallego’s bill is endorsed by the American Federation of State, County and Municipal Employees as well as by the Alliance for Retired Americans and the AFL-CIO. Sen. Bob Casey, D- Penn., has introduced companion legislation in the Senate.