For the 2nd year in a row people who rely on Social Security will not be receiving a cost of living raise. This is only the 2nd time since the cost of living adjustment (COLA) was implemented that recipients have not received an increase.
The reason Social Security benefits will not be revised in 2011 is that inflation has been too low. The whole premise behind the COLA is that benefits are revised for inflation thus recipients can keep up with increasing prices. If there's no inflation, there's no need for cost of living increase. The most recent inflation numbers published by the Labor Department indicates that prices are lesser than they were in 2009, the last time Social Security benefits were raised.
The COLA in 2009 was the largest seen in 27 years at 5.8 percent. The raise in 2009 was so large because of gas prices that sky-rocketed in the summer of 2008. When gas prices decreased, so did the in general inflation rate. While the government can not decrease Social Security benefits if there is deflation (when prices are reducing), they can choose to not give a cost of living adjustment raise, that has been the case for 2010 and looks to be the case for 2011.
Possible Incentive Payment to Help Seniors Who Rely on Social Security Benefits
To help Seniors who depend on their Social Security benefits to help with living costs, Congress will be voting on a $250 incentive payment for Social Security recipients to help make up for the fact that Social Security benefits will remain unchanged for second year in a row. An update will be provided once the bill has been voted on.
No Social Security COLA Means No Increase in Medicare B Premiums
One silver lining to no cost of living raise is that Medicare Part B premiums wont increase for existing enrollees. A small percentage of Medicare Part B participants will pay increased premiums, including people who have Medicare Part B but who are not yet collecting Social Security benefits, people who're considered "high income" and people who're just now enrolling in Part B. But, a "hold-harmless" provision protects current participants from rate increases if their Social Security benefits don't raise, so no cost of living increase for Social Security recipients also means no Medicare Part B premium increase also.
Social Security Death Benefits Can Really Help Monetarily Once Husband Or Wife Or Other Loved One Has Passed Away
Qualifying relatives of individuals who have passed away can receive assistance from social security death benefits. The payments provided vary and depend on a number of things such as the payments that have been made to social security as well as the relationship of the relative to the individual.
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