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In 2022, the average retiree’s total monthly Social Security payment was $1,657. If the 10.5% increase the Senior Citizens League expects ultimately materializes, Social Security beneficiaries could stand to pocket an extra $175, rounding the average payment out to an estimated $1,832 per month.
However, the increased payments associated with COLA may not stop there.
When COLA increases, primary Social Security payments won’t be the only thing going up. The COLA also affects Supplemental Social Security income. The Supplemental Social Security Income program provides beneficiaries with additional monthly funds, which vary by state and by individual.
Although Supplemental Security income and Social Security income are both intended to be used for basic needs, these needs aren’t necessarily limited to food, water and shelter. Social Security Administration guidelines indicate that recipients can also use their Social Security payments income to pay for assisted living or a live-in caregiver.
Under federal law, Social Security payments may be spent on home health aide services, chore services, personal care services, nursing care provided by (or under the supervision of) a registered nurse, respite care, training for caregiver relatives, adult day care, clinic services and other home- and community-based services.
Depending on the state that recipients live in, they could potentially receive anywhere from a couple hundred to an extra $1,500 per month for long-term care required due to a disabling condition. States may opt into funding assisted living for their residents, and may issue payments in the form of optional state supplements, in addition to the federal supplement and a beneficiary’s primary Social Security payment.
In many states, these supplemental funds are generally only available to those who currently reside in or intend to reside in a long-term care facility like assisted living or a nursing home. These programs vary widely. Some states, such as Tennessee, have no program for supplemental security income at all. Meanwhile, other states, such as Rhode Island, issue individuals living in a licensed residential care or assisted living facility an average of $1,173 a month. If the upcoming COLA is declared to be 10.5%, Rhode Island beneficiaries could receive an extra $123.65 per month in optional state supplemental income for assisted living.
While Social Security payouts are generally increasing, many fear that this could spell the end of the program. According to the Social Security Administration’s 2022 annual report, trust fund reserves are estimated to be depleted by 2035. But while this figure doesn’t bode well, history tells us this doesn’t necessarily spell the end of the program.
After COLA was introduced in 1972, Social Security trusts also faced potential defunding, but the threat was much more imminent. Per a 1975 report, the trustees expected funds to be exhausted by 1979. In 1977, however, the Social Security Administration was able to enact amendments that preserved the viability of the program. Among other things, the 1977 amendments provided for an increased payroll tax that made it possible for the program to continue to benefit millions of Americans today.
To find out what programs your state may offer, check out this list.
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