Social Security recipients could be getting an additional $2,400 a year in benefits if a new bill recently introduced to Congress wins approval. The substantial “bonus” would be something seniors would no doubt welcome as surging inflation wipes out their annual cost-of-living increases.
The Social Security Expansion Act was introduced on June 9 by U.S. Rep. Peter DeFazio (D-Ore.) and U.S. Sen. Bernie Sanders (I-Vt.), Under the terms of the bill, anyone who is a current Social Security recipient or who will turn 62 in 2023 would receive an extra $200 in each monthly check.
The bill is timely for a couple of reasons. First, it follows a disturbing Social Security Administration announcement earlier this month that Americans will stop receiving their full Social Security benefits in about 13 years without actions to bolster the program.
It also comes during a period of historically high inflation that has a particularly big impact on seniors living on fixed incomes, many of whom rely solely on Social Security payments. This year’s Social Security Cost-of-Living Adjustment (COLA) of 5.9% is based on inflation figures from 2021. But since then, inflation has pushed well above 8%, meaning Social Security recipients today are actually losing money.
The new bill aims to ease the financial strain by boosting each recipient’s monthly check. The average monthly Social Security check is about $1,658, meaning a $200 increase would represent a 12% boost.
“Many, many seniors rely on Social Security for the majority, if not all, of their income,” said Martha Shedden, president of the National Association of Registered Social Security Analysts. “$200 a month can make a significant difference for many people.”
The bill also has changes that are designed to tie the COLA increase to more realistic economic markers and to make and keep the program more solvent. Primarily the bill proposes adding more funding to the SSI coffers by applying the Social Security payroll tax on all income above $250,000. Currently, earnings above $147,000 aren’t subject to the Social Security tax.
Even if the bill in its current form doesn’t pass Congress, experts expect lawmakers are going to have to move on some kind of change to Social Security to ensure it serves the needs of recipients well into the future.