For the second year in a row, Social Security recipients will not receive a cost-of-living adjustment for 2011. For the last 30-plus years, retirees, disabled individuals, surviving spouses and dependent children have relied on small annual increases to their benefits checks in response to inflation. In the past two years however, inflation has not grown at a rate that supports an increase in Social Security benefits.
Experts anticipate that that next cost-of-living adjustment will come in 2012, at 1.2 percent if inflation continues at its current level, or when consumer prices return to the same levels as in 2008.
In an attempt to counteract the lack of a cost-of-living adjustment, legislation has been proposed in Congress, with the support of President Obama, for a one-time $250 payout to all Social Security recipients. This action is similar to a previous payment in 2009 as part of the stimulus package, but will not replace the lost increased in benefits under a cost-of-living adjustment.
At the same time SSA benefits are remaining the same, Medicare premiums may be increasing. No formal announcement has been made yet, however if there is an increase in premiums, many Social Security recipients will not be subject to the increase. Beneficiaries who will not see an increase in their premiums must (a) be entitled to Social Security benefits for November and December; (b) have the Medicare Part B premium deducted from their benefits in December and January; and not have modified adjusted gross outcome of over $85,000 for individuals and $170,000 for a couple.
The earnings threshold to be credited a quarter of coverage for SSDI eligibility will remain $1,120.