With the news that nearly 63 million Social Security recipients will see a 1.5% boost in their benefits next year, an average increase of $19 per month, the AARP worries that even smaller increases are in store if Washington ties them to the chained consumer price index, as proposed in President Barack Obama’s budget.
An average of just $19 per month will “quickly be consumed by the rising costs of basic needs like food, utilities and health care,” said Nancy LeaMond, Executive Vice President of AARP, in a Wednesday statement. AARP is a senior advocacy group that has supported increased Social Security benefits.
The Social Security Administration announced Wednesday that the upcoming Cost of Living Adjustment (COLA) will begin in January for the more than 57 million Social Security beneficiaries, and increased payments to the more than 8 million Supplemental Security Income recipients will begin Dec. 31.
The administration raised benefits 1.7% this year and 3.6% in 2012. There was no COLA in 2011 or 2010. Excluding those two years, the 2014 adjustment will be the smallest since 2003.
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While the annual COLA is “critically important” to the Americans receiving benefits, as it provides protection against inflation, Leamond said, and “helps beneficiaries of all ages maintain their standard of living, keeping many from falling into poverty,” some in Washington aim to make the “small COLA even smaller” by including the chained CPI in a budget deal.
Said LeaMond: “The chained CPI would further lower the COLA for Social Security and veterans’ benefits with cuts that would start now and grow larger every year.”
Under chained CPI, the 1.5% COLA announced Wednesday, she said, would be reduced, “putting increasing strain on millions of beneficiaries struggling to keep up with expenses.”