The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

No Cost Of Living Increase For 50 Million Social Security Recipients

Posted By admin || 27-Oct-2009

Retirement

According to an article in the Dallas Morning News, over 50 million Social Security recipients, many facing foreclosure and bankruptcy, will not receive a cost of living increase for the first time since cost of living increases were adopted in 1975. Why?  Supposedly the prices of critical consumer goods are falling. But I guess they haven't noticed that many are still struggling with non-consumer goods such as housing during this foreclosure crisis. But I digress.

Cost of living increases for Social Security are based on inflation, which is "officially" negative this year because of "lower" energy costs. But some advocates for seniors say that the formula used to determine increases are faulty because seniors use a large portion of their income to pay for medical care costs, especially prescriptions.

The article said:

"The lack of a cost of living increase triggers several provisions in the law. Among them, the amount of wages subject to Social Security payroll taxes will remain unchanged. The first $106,800 of a worker's earned income is currently subject to the tax. Also, Medicare Part B premiums for the vast majority of Social Security recipients will remain frozen at 2009 levels. However, premiums for the Medicare prescription drug program, known as Part D, will increase."

The article gives us all another example of how sometimes the system designed to care for seniors actually does the opposite. Many seniors are already living on the edge. Today, more seniors than ever are still paying on a mortgage and some are even facing foreclosure. The average monthly payout for Social Security is only $1094, hardly enough to cover the expenses of the average senior citizen let alone enough to support one trying to avoid foreclosure or bankruptcy.  The other nonsensical provision in our laws covering Social Security is that the Medicare prescription drug program premiums would increase.  Prescription drugs are often some of the most expensive items on a senior's list of expenses. Why would they increase?  The good news is that some seniors can expect a $250 stimulus in the mail soon.

Categories: Economy
Blog Home