The Cost of Living Adjustment COLA payments that benefit approximately 70 million Americans will see a generous increase of 8.7% in 2023. Recipients of COLA Social Security benefits will get their monthly payments worth up to $1,657 in a little more than a week. With all other federal direct stimulus checks on hold, the increase in the amount is significant given the record inflation that has assailed low and moderate-income households.
The COLA Social Security payment will begin this month on the twelfth. The payment will start with people who have their birthdays between 1-10 October. Social Security payments are linked to the birthday of recipients based on a Social Security Administration calendar.
People who have their birthdays on a later date will have to wait one or two weeks before receiving their payments. People born between the eleventh and the twentieth of the month will receive their stimulus check on the nineteenth and those born between the twenty-first and the last date of the month will get their payment on October 26.
The Stimulus Check Amount Will Depend On COLA Adjustments
The COLA benefit payments start from $388.35 and could even reach $1,682 depending on the income level and the status of the beneficiary, as detailed by the SSA.
Supplemental Security income payments and Social Security payments are different as the Social Security programs are entitlement plans and are financed by Social Security taxes that are placed into special trust funds.
The SSA authorities have detailed that people qualify for their Social Security benefits that are based on the work history of claimants or that of their parents or spouse. Supplemental Security income on the other hand is a needs-based program that targets families with limited resources and income and does not require work credits to be eligible to gain access to the funds.
Citizens can be beneficiaries of both COLA Social Security and Supplemental Security stimulus checks. But people who receive the SSI stimulus check must report changes in their income and also their living arrangements to the SSA.
On the other hand, individuals who receive both the SSA and the SSI payments will receive the latter stimulus check on the first of each month and the SSA payments on the third. The only exception is that the SSA does not fall on a weekend. In such eventually, they must receive their payment on a Friday before the third week.
For SSI beneficiaries, the monthly payments reach both adults and children who have blindness or disability and whose resources and income are below particular financial limits.
Around 65 M citizens will receive a Social Security retirement benefit this month, the Social Security Administration (SSA) informed. The average benefits for every retired worker work out to an estimated $1,657, which is the primary income source for many of the beneficiaries.
Several Factors May Contribute To A Small Social Security Stimulus Check
Many have saved funds in individual retirement accounts, 401(k) plans, or in other qualified plans linked to retirement. But even they will be shocked if they are banking on Social Security as a supplement to that when the first installment of the payment arrives.
For those who have recently begun receiving Social Security benefits, there are 3 common reasons for getting less than expected. It could be a high income, withdrawal of benefits early, and outstanding debt offsets.
People who own debts such as student loans and back taxes will have their Social Security checks decreased. Taking Social Security benefits earlier can mean a reduction in payment that could be as high as 30%. Higher Medicare premium that is triggered by high income can have a negative effect on the Social Security stimulus check you receive each month.
One of the leading factors for a small Social Security check could be an offset. That is when someone claims the benefits that you get because you owe them money.
Offset debts can include back taxes, unpaid child support obligations and alimony, and default on student loans.
The initial $750 of the benefits you receive under the Social Security funds have been protected and cannot be offset. But if it is determined that a certain amount of debt is linked to you, the SSA may reduce an amount from your Social Security stimulus check till the debt is repaid. Once you satisfy the debt obligation, you will start receiving the full amount and will have to deal with a small stimulus check in the intervening months or years.
You may also be subjected to an offset deduction if you receive benefits from Social Security before reaching the full retirement age and continuing in your job. But once you have reached the full retirement age, your earnings will not affect your benefits negatively, whatever your earnings.
For the present retiring community, the full age for retirement for COLA Social Security is 66 or 67. It is linked to the year in which you were born. But you can start taking your Social Security retirement benefits starting at 62. Though you get early financial relief, especially vital for households strapped for cash, there is a negative tradeoff. Your benefits are automatically decreased, and to top it all, the decrease is permanent.
Big Payout For Social Security Beneficiaries Starting January 2023: COLA To Kick In
Social Security benefits increase based on inflation, something that most Americans are ignorant of. The Social Security Administration does indeed endorse a COLA (Cost Of Living Adjustment) each year to help beneficiaries adjust to rising costs.
For the first time in 2023 people will benefit from the highest COLA in over 4 decades. Other than that there are a few more significant adjustments.
To offset the scorching pace of inflation that has hit the US economy in the past year, Social Security benefits will get an 8.7% rise in 2023. This will largely offset the impact of record inflation spikes that has remained above the 8.5% mark for most of 2022 and even touched 9.1% in June, the highest since November 1981.
The scorching rise in prices in 2022 has driven up the price of utilities, medical care, food, and fuel. The 8.7 COLA for 2023 will hopefully offset to a large extent the effect of the price rise.
