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Wednesday, July 17, 2024

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Van Drew, Smith Bill Would Boost COLA for Social Security Receivers

Van Drew - File Photo.jpg

By Press Release

WASHINGTON – U.S. Reps. Chris Smith and Jeff Van Drew Oct. 19 introduced legislation to significantly increase the annual cost-of-living-adjustment (COLA) for Social Security recipients after it was announced earlier this week by the Social Security Administration that the COLA effective December 2020 is going to be 1.3%. 

According to a release, the Smith-Van Drew proposal would increase the 2020 COLA to 3% in 2020, and no less than 3% more in 2021. 

With the average Social Security payment to individuals being $1,514 a month or $18,168 annually, the announced SSA increase would only provide a $236 COLA for 2021. The Smith-Van Drew bill would increase the average COLA to $545 for both 2020 (retroactively) and 2021, or an estimated $1,090 over two years. 

“COVID-19 has not only disproportionately harmed senior citizens—causing death to many especially in nursing homes—but has devastated them economically as well,” stated Smith (R-4th). 

“HR 8600, the COVID-19 Emergency Social Security Cost of Living Increase Act, is aimed at helping seniors and other Social Security recipients keep up with rising costs they experience in their daily lives, especially in health care,” Smith stated. “The COLA announced this week does not reflect the costs seniors cope with every day. It is unfair, and the COVID-19 Emergency Social Security Cost of Living Increase Act will help remedy that unfairness.” 

Van Drew (R-2nd) stated, “The burden on South Jersey seniors from taxes, tolls and coronavirus has been enormous. Social Security recipients need more assistance to ensure the promise made to them is kept. This legislation is a key part of that commitment and we will fight as hard we can to ensure it is enacted.” 

The legislation would also reform the formula for calculating annual COLA increases by using a senior consumer price index (senior CPI) beginning in 2021.  

Social Security COLAs are currently based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which excludes items like taxes, such as state and federal income taxes, and does not accommodate the disproportionate impact of health costs on seniors. Smith’s bill would provide a 3% increase retroactively for 2020 to address the COVID-19 impact, as well as at least a 3% increase in 2021. It would also permanently address the shortcoming of basing annual COLAs on the standard CPI-W in favor of a “Senior CPI.” 

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