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Wednesday, October 24, 2012

Social Security Benefit Increase in 2013 May Be Hard to Notice

Recently, the Social Security Administration (SSA) announced that it will increase the Social Security payments by 1.7 percent next year.

Accordingly, it is one of the smallest increases in the cost-of-living adjustment (COLA) since the automatic annual increase in benefits took effect in 1975. In fact, it is only the sixth time that the adjustment has been less than 2 percent since the program was launched.

In addition, this year, recipients received a 3.6 percent increase after having no increase at all in the past two years.

Incidentally, it was as early as 1940 when the first recipient started receiving benefit payment and since then, each increase in COLA had to be approved by Congress.

Since 1950, Congress had made several amendments, removing political pressures from the annual process. Furthermore, the increase becomes automatic and based on mathematical computations using standard statistical gauges.

At present, retirees usually receive an average of $1,237.00 a month. Therefore, the increase will be about $21.00 a month to the recipients’ payments. However, the agency warned other beneficiaries that their social security increase will be partially or completely withheld by increases in Medicare premiums.

Generally, the Medicare premium is now almost $100.00 a month and in the future it is more likely to increase by $7.00 a month once the federal government decided to put up an increase. The Part B premium usually covers doctor’s visits.

Consequently, according to AARP executive vice president, Nancy LeaMond, the humble COLA adjustment will only be consumed by healthcare and prescription costs of seniors, which constantly surpass inflation.

The AARP, or the American Association of Retired Persons, is an organization that lobbies on behalf of senior citizens.

LeaMond further said that seniors and other recipients keep struggling to make both ends meet. Nevertheless, they still feel like falling further.

As previously reported, the federal agency is currently experiencing financial crisis as a result of the economic recession. Therefore, the same is currently working its way to reduce its expenditures. In fact, the agency recently shut down nearly 50 field offices and trimmed office hours by thirty minutes twice already.

Also, it will allegedly layoff nearly 40,000 jobs this year. Subsequently, the most probable reason why the agency will have another increase, which is less than the average 2 percent hike, seems to have something to do with its cost cutting efforts, speculated by a Los Angeles social security disability lawyer.