COLA 2022: Could Social Security Payments Affect US Inflation?

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Since October 2020, consumers have paid an average of 6.2% more for goods and services, according to the Bureau of Labor Statistics. This is the largest increase in 30 years. From September to October, the consumer price index (CPI) rose 0.9%, the largest increase since June, when the same increase was recorded. 

This increase could have serious implications for fixed income households, such as recipients of social security benefits. Social Security beneficiaries receive an average of $ 1,543 a month in checks, so it can be difficult to qualify during periods of high inflation.

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To calculate the Adjusted Cost of Living (COLA), the Social Security Administration (SSA) compares the average consumer price index for the third quarter of this year: city and white-collar workers (CPI-W) with the previous quarter.

 This October, SSA announced historic growth of 5.9% based on CPI data from July to September 2020 and September 2021. It was released to the market last year. In October 2020, SSA announced that the number of beneficiaries will increase by 1.3% in 2021, which is reflected in its revenues. 

However, from October 2020 to January 2021, prices fell by almost half. If the 2021 COLA reflects continued consumer spending growth in 2020, actual growth in 2021 will be close to 1.7%.

By 2021, the average social security beneficiary’s income generally exceeded this limit. This is what is called the SNAP coverage gap. Coverage gaps are people whose income is too low and food insecurity is too high to be covered by SNAP or other social benefits. This problem is not unique to the elderly. 

Just Harvest reported earlier this year that “only 55% of people with food insecurity are eligible for food stamps.” By 2021, the average social security beneficiary’s income generally exceeded this limit. This is what is called the SNAP coverage gap. Coverage gaps are people whose income is too low and food insecurity is too high to be covered by SNAP or other social benefits.

This problem is not unique to the elderly. Just Harvest reported earlier this year that “only 55% of people with food insecurity are eligible for food stamps.”

With inflation rising, many Republicans are rushing to defeat the Biden administration. Nobody is proposing to amend the law to minimize harm to adults or children. 

The blame game is simple, but leaders need to know that by gambling, millions of people are starving and adults are risking their health to make it to the end of the month.