No Social Security raise coming

Published 12:03 am Saturday, October 16, 2010

A lagging economy means there will be no increase in Social Security benefits for the second year in a row.

The announcement came Friday after weeks of talks that the automatic increase provided under law for the more than 58 million Ame-ricans receiving Social Security and Supplemental Security Income (SSI) would not be forthcoming because there had been no increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers.

Under law, cost of living adjustments, or COLAs, can only be given when there is a CPI-W increase from the third quarter of the year the last COLA was given to the third quarter of the current year.

“The last COLA was given in third-quarter of 2008, and since there’s been no increase in the CPI-W since then to the third quarter of the current year, there can be no COLA,” said Kylle McKinney, public affairs specialist with the Social Security Administration in Montgomery.

Other changes that would normally take effect based on changes in the national average wage index also will not take effect in January 2011, McKinney said.

She said since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts.

“These amounts will remain unchanged in 2011,” she said.

The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2011.

“Should there be an increase in the Medicare Part B premium, the law contains a ‘hold harmless’ provision that protects more than 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit,” she said.

Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2011, she said.

In addition, almost 20 percent of beneficiaries have their Medicare Part B premiums paid by state medical assistance programs and thus will see no change in their Social Security benefit, she said.

The state will be required to pay any Medicare Part B premium increase.

For additional information about the 2011 COLA, go to