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Social Security News

Social Security COLA for 2014 Will be Announced Tomorrow: Early Halloween or Christmas

Most experts predict a record low 1.5 percent increase – or less

Oct. 29, 2013 – Halloween may come a little early for senior citizens, but hopefully it will be an early Christmas. The Consumer Price Index for September is due to be released tomorrow at 8:30 a.m. by the Department of Labor Statistics. It is the last number needed to determine the Social Security cost-of-living adjustment (COLA) for 2014, which is currently projected to be a small bump of 1.5 percent or less. It was only 1.7 percent for 2013. The Social Security Administration says they will announce the COLA “sometime tomorrow.”

Although the increase is expected to be small, seniors got some relief yesterday from an announcement by the Centers for Medicare & Medicaid Services (CMS) that there will be no increase in 2014 Medicare Part B premiums and deductibles, and more than $8 billion in cumulative savings in the prescription drug coverage gap known as the “donut hole.”  

 

Related Archived Stories

 
 

Social Security COLA Increase of About 1.5 Percent Now Expected on October 30

The cost-of-living allowance for seniors and others on Social Security was delayed due to ‘lapse in funding’ by Department of Labor’s CPI determination

Oct. 18, 2013

National Council on Aging Tells Congress to Protect Social Security, Medicare

If Congress fails to increase the debt limit key payments to seniors may not be made

Oct. 14, 2013

Chained CPI May Reduce Your Retirement Income; Social Security Advocates Stir Opposition

National Committee, a leader in battle against chained CPI to determine social security COLA, issues study on detrimental impact, provides informational sources

Oct. 13, 2013

No COLA for Seniors on Social Security: Government Shutdown Delays Calculation

Oct. 10, 2013

More Links to News on Social Security COLA below news story.

Read more Social Security News

also check Medicare and Senior Politics

 

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective.

If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.

Assuming there will be an increase in the COLA, benefits will increase beginning with the December 2013 benefits, which are payable in January 2014. Federal SSI payment levels will also increase by the same percent effective for payments made for January 2014. Because the normal SSI payment date is the first of the month and January 1 is a holiday, the SSI payments for January are always made at the end of the previous December.

If 1.5% proves to be correct, then the average COLA paid over the past five years was will be 1.4%, according to Shannon Benton, Executive Director of The Senior Citizens League.  

“This would be a record low period since the COLA became automatic,” she adds.

“The purpose of the COLA,” according to SSA, “is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.”

This year, there is also concern among senior citizens and their advocates about the possible change of the CPI, since President Obama suggested earlier that the annual COLA should be based on an inflation measure known as the “Chained CPI.” Identified as “C-CPI,”

he chained CPI, according to AARP, “measures living costs differently because it assumes that when prices for one thing go up, people sometimes settle for cheaper substitutes (if beef prices go up, for example, they'll buy more chicken and less beef).

“Bottom line: Cost-of-living adjustments would be lower with the chained CPI than with the plain old CPI. So depending on which formula is used, the amount of your Social Security payments could change over time.

More Links to News on Social Security COLA for 2014

Senior Citizen League Projecting Small 1.5% COLA for Social Security in 2014

SSA should make it official on October 15, after September CPI is calculated; advocates keeping close eye on chained CPI proposed by Obama, CPI for elderly ignored for years

By Tucker Sutherland, editor, SeniorJournal.com

Oct. 3, 2013

Chained CPI Affects More Than Social Security COLA, Seniors Would Get Less, Pay More

The Seniors Citizens League (TSCL) continues to be an unrelenting fighter to preserve Social Security and the cost-of-living allowance now in place - COLA for 2014 should be announced this month

By Tucker Sutherland, editor

Oct. 2, 2013

Long-Term Survival of Social Security Unchanged in Latest Trustee Report

Downhill slide will begin with 2021; depleted in 2033

June 3, 2013

First Public Hearing Underway on Chained CPI Proposed to Slow Future COLA for Senior Citizens

Republican chair of House Ways and Means subcommittee on Social Security issued news release blasting Treasury secretary; in opening says reducing COLA only would be called ‘benefit cut’ in Washington

April 18, 2013

Ways and Means Draws Bead on Medicare Cuts, Chained CPI to Limit COLA for Social Security

HHS Secretary Sebelius in witness chair today on total budget for HHS, CMS with Social Security proposal the target this Thursday

April 12, 2013

Obama Says Budget Proposal Offers ‘Manageable’ Curbs on Medicare Cost, Social Security Benefits

Most media reports say focus of White House is to strike a ‘Grand Bargain’ with Republicans who want to change Medicare into a voucher-style system;  Medicare proposal has one revenue item - higher premiums for couples making more than $170,000 a year - April 11, 2013

How Chained Consumer Price Index Proposed by Obama Works to Curb Social Security Benefits

Bureau of Labor Statistics provides a Q&A about inflation calculation that will slow cost-of-living adjustments for senior citizens

April 11, 2013

Reporters Dig Into Obama Budget and Find Other Proposals that May Impact Seniors

More spending on Medicaid, mental health; replacing current formula for Medicare pay to doctors

April 11, 2013

Congress Could Lose Older Voters by  Cutting Social Security, Medicare, Vets Benefits: AARP Poll

Senior advocates seem solid in opposition to cuts expected to appear Wednesday in President Obama’s budget; Congressional call-in on Wednesday

April 8, 2013

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