Whether this bill moves forward or not, boosting payroll taxes in some fashion is viewed as a way to guarantee that current and future retirees don't lose benefits after 2035.Watch Video: 2020 taxes: Do you owe taxes on stimulus checks or unemployment? "Social Security was set up to be based on contributions on earned income, and this mixes up the basket of earned and unearned income." Would those changes fix the program's funding shortfall?Įxpanding the payroll tax would boost the Social Security Administration's trust fund, ensuring its solvency through 2096, according to DeFazio. The bill would also extend the Social Security payroll tax to investment and business income, an issue that could face resistance. However, there's one quirk about this arrangement: It would create a "donut hole" in which earnings between $147,000 and $250,000 would not be subject to the payroll tax, Shedden noted. Only the top 7% of earners would see their taxes go up as a result, according to DeFazio. Under the bill, the payroll tax would kick in again for people earning above $250,000. But higher-income workers who make more than $147,000 annually don't pay the Social Security tax on any earnings above that level. To be sure, most Americans earn less than that. Currently, workers pay the Social Security tax on their first $147,000 of earnings. The bill would increase the Social Security payroll tax on higher-income workers. The lawmakers say extending this benefit would help ensure that the children of deceased or disabled parents can continue their education beyond high school. Currently, the program ends for children of disabled or deceased workers when they turn 19 years old or before that age if they are no longer a full-time student.
The legislation would raise the eligibility age for students to collect benefits to 22, provided the individual is a full-time student in college or a vocational school. Some people may not be aware that Social Security provides benefits to children of disabled or deceased workers if they are full-time students. More help for children of deceased workers In 2020, the Special Minimum Benefit paid about $900 per month, according to the Social Security Administration. Under the legislation, it would be indexed so that it is equal to about 125% of the federal poverty line, or about $1,400 a month. The bill would also boost benefits for the lowest income earners in the U.S., who receive benefits under a program called the Special Minimum Benefit. If the CPI-E had been used to index the annual COLA for Social Security, a senior who filed for Social Security benefits over 30 years ago would have received about $14,000 more in retirement than compared with the CPI-W, according to the Senior Citizens League. For instance, it puts more weight on health care expenses, which can be considerable for senior citizens. The CPI-E more accurately reflects seniors' spending patterns, according to experts on Social Security. One of the primary changes would be to base the annual COLA on the Consumer Price Index for the Elderly (CPI-E), rather than the current index that the Social Security Administration uses for its calculation - the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). There are some additional tweaks that would boost benefits over the long-term. Inflation in May rose 8.6% from a year ago, a four-decade high that pushed up the cost of food, shelter, energy and other staples.Ī benefits boost: $200, plus COLA changesĪnyone who is a current Social Security recipient or who will turn 62 in 2023 - the earliest age at which an individual can claim Social Security - would receive an extra $200 per monthly check. But this year, beneficiaries are seeing their purchasing power wane as inflation overtakes their latest COLA increase of 5.9%. Social Security recipients receive one cost-of-living adjustment, or COLA, each year, which is based on inflation and is supposed to keep their benefits in line with rising prices.
#SSI PLUS UP PAYMENT FULL#
The plan comes after the Social Security Administration earlier this month said Americans will stop receiving their full Social Security benefits in roughly 13 years without actions to shore up the program.
Peter DeFazio, a Democrat from Oregon, and Senator Bernie Sanders, an Independent from Vermont. The Social Security Expansion Act was introduced June 9 by Rep. Now, some lawmakers have a plan to boost Social Security payments by $2,400 per recipient annually, while also shoring up the program financially. are being hit hard by inflation, which has outpaced increases in their benefits this year.
Seniors and other Social Security recipients in the U.S. El-Erian says inflation could hit 9% 08:59
0 kommentar(er)
