Social Security Recipients Lose COLA Wars

January 15, 2010

Author: Catherine M. Callery (Kate) | Louise M. Tarantino

Move over Coke and Pepsi. The COLA wars continue into 2010, and the big losers are recipients of benefits administered by the Social Security Administration (SSA).  Of course we are talking about the Cost of Living Adjustment (COLA) that SSA has added to its benefit programs for every year of the programs’ existence.

For 2010, however, SSA announced that there will be no increase in its benefit programs because there was no increase in the Consumer Price Index upon which any COLA is based.  http://www.ssa.gov/OACT/COLA/colasummary.html. This means that some retirees, disability beneficiaries, and SSI recipients will get the same amount of benefits as last year, and some will actually get less money in the coming year due to Medicare premium increases and possible state supplement reductions.

For Title II beneficiaries of Retirement or Disability benefits, things will pretty much stay the same as far as monthly benefit amounts.  Current beneficiaries will continue to pay Medicare Part B premiums of $96.40 per month.  New Part B beneficiaries will pay $110.50 (because they did not have the premium withheld from their Social Security benefit in the previous year).  Beneficiaries who do not currently have the Part B premium withheld from their Social Security benefit will pay $110.50.  Higher-income beneficiaries pay $110.50 plus an additional amount, based on the income-related monthly adjustment amount (IRMAA). http://questions.medicare.gov/cgi-bin/medicare.cfg/php/enduser/std_adp.php?p_faqid=2260.

The maximum taxable earnings for OASDI (old-age, survivors and disability insurance) purposes will remain at $106,800 for 2010.  The amount of taxable earnings a person must have to be credited with a quarter of coverage will be $1,120, up from $1,090 in 2009.

For SSI recipients, the Federal Benefit rate (FBR) will continue at $674 for an individual and $1,011 for a couple. The trial work period earnings threshold will rise to $720 per month in 2010, up $20 from last year.  The monthly amount deemed to constitute substantial gainful activity (SGA) for non-blind disabled persons will be $1,000, up from $980.  The SGA earnings for blind individuals will remain at $1,640.  The student earned income exclusion will remain at $1,640, with maximum earnings of $6,600 for all of 2010. http://edocket.access.gpo.gov/2009/pdf/E9-25930.pdf; http://www.ssa.gov/OACT/COLA/sga.html.

As we wrap up baseball’s Fall Classic, who more appropriate to quote than Yogi Berra when we observe that it’s like déjà vu all over again with respect to New York State’s proposal to decrease the state supplement payable to SSI recipients. The Governor’s Deficit Reduction Plan (DRP) calls for cutting New York’s SSI state supplement by $14/month for those living alone and $9/ month for those living with others. The cut would be effective in February 2010 since the federal government requires 90 days notice when states make changes in the state supplement amounts.  The cut would result in $11.4 million in “savings” through March 31, 2010.

You may recall that the State proposed a similar state supplement reduction in January 2009.  See Disability Law News, January 2009. This proposed reduction was eliminated after a great outcry from the advocacy community representing the interests of SSI recipients. Advocacy efforts will be mobilized again to beat back this measure that so negatively impacts vulnerable, poor, disabled person.  As Yogi also said, it ain’t over ‘til it’s over, so stay tuned for further developments on this front.

Addendum:  In a December 2, 2009 vote, the New York State Senate rejected the Governor's proposal to reduce the SSI state supplement.  Therefore, the 2010 state supplement will continue as in previous years.