Social Security Benefits: Certain Crucial Details On Cost Of Living Adjustment

For the second year in a row people who rely on Social Security wont receive a cost of living increase. This is only the 2nd time since the cost of living adjustment (COLA) was adopted that receivers haven't received an increase.

The reason Social Security benefits will not be adjusted in 2011 is that inflation has been very low. The whole premise behind the cost of living adjustment is that benefits are adjusted for inflation so receivers could keep up with rising prices. If there's no inflation, there is no need for cost of living increase. The newest inflation numbers published by the Labor Department shows that prices are lesser than they were in 2009, the last time Social Security benefits were increased.

The cost of living adjustment in 2009 was the biggest seen in 27 years at 5.8 percent. The increase in 2009 was so large due to gas prices that sky-rocketed in summer of 2008. When gas prices fell, so did the in general inflation rate. While the government can't reduce Social Security benefits if there's deflation (when prices are dropping), they can decide to not provide a COLA raise, which was the situation for 2010 and looks to be the case for 2011.

Possible Bonus Payment to Help Seniors Who Depend on Social Security Benefits

To aid Seniors who rely on their Social Security benefits to help with living costs, Congress will be voting on a $250 bonus payment for Social Security receivers to aid make up for the fact that Social Security benefits will remain unchanged for the second year in a row. An update will be provided when the bill has been voted on.

No Social Security COLA Means No Raise in Medicare B Premiums

One silver lining to no cost of living increase is that Medicare Part B premiums wont go up for current enrollees. A little percentage of Medicare Part B participants will pay higher premiums, including people who've Medicare Part B but who're not yet collecting Social Security benefits, people who are considered "high income" and people who're just now enrolling in Part B. However, a "hold-harmless" facility protects existing participants from rate increases if their Social Security benefits don't increase, so no cost of living raise for Social Security recipients also means no Medicare Part B premium raise either.

Social Security Benefits: Certain Crucial Details On Cost Of Living Adjustment
For the second year in a row people who rely on Social Security will not be receiving a cost of living increase. This is only the second time since the cost of living adjustment (COLA) was adopted that recipients have not received an increase.

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