A proposed change in the calculation method for the yearly Cost-of-Living-Adjustment (COLA) could result in higher monthly benefits for Social Security recipients. The adjustment aims to better align benefits with the actual expenses experienced by seniors.
The Boosting Benefits and COLAs for Seniors Act, introduced by Rep. Ruben Gallego, D-Arizona, proposes changes to the calculation of the COLA for social security recipients.
If enacted, this bill would require the use of the Consumer Price Index for Americans aged 62 and older to determine the COLA, replacing the current use of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
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Currently, COLA adjustments are based on CPI-W data from the third quarter of each year. The proposed change aims to provide a more accurate reflection of inflation experienced by seniors, particularly in areas such as healthcare, food and housing. Advocates argue that the CPI-W does not adequately capture the rising costs seniors face, leading to insufficient adjustments in Social Security benefits.
“The current COLA formula doesn’t accurately account for the inflation seniors face, especially in health care,” Roman Ulman, president of AFSCME Arizona Retirees Chapter 97, said in a statement. “It’s important that the COLA reflects how inflation impacts seniors so that we can pay our bills and our monthly Social Security checks stay strong.”
The bill has garnered support from various organizations, including the American Federation of State, County and Municipal Employees, the Alliance for Retired Americans, and the AFL-CIO. Bob Casey, D-Pennsylvania, has introduced companion legislation in the Senate.
If implemented, this new calculation method could lead to increased monthly benefits for Social Security recipients, ensuring that their payments better align with the actual expenses they incur.