16 Things Seniors Born Between 1941-1969 Could Take Advantage Of
House Ways and Means Social Security Subcommittee Chairman John Larson (D-CT) introduced a bill last month that would increase Social Security benefits, improve the cost-of-living adjustment (COLA) calculation, and repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
SEE ALSO: How CSRS Employees Are Impacted by Social Security’s WEP and GPO Provisions
According to a section-by-section summary of the “Social Security 2100: A Sacred Trust” bill (HR 5723), below are some of the highlights:
Across-the-board benefit increase to Social Security.
Provides an immediate benefit increase for all beneficiaries of $30 a month, representing a 2 percent benefit increase for the average retiree. Effective in 2022-2026 for all beneficiaries.
More accurate cost-of-living adjustment.
Improves the annual cost-of-living adjustment (COLA) by basing it on a consumer price index for the elderly (CPI-E), which measures the cost increases experienced specifically by seniors. The CPI-E is projected, on average, to be higher than the CPI-W by 0.2 percentage points per year. Improved inflation protection will especially help older retirees and widows who are more likely to rely on Social Security benefits as they age. Effective for COLAs in December 2022 through December 2026.
Repealing the government pension offset and windfall elimination provisions.
Repeals the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP), so that affected state and local government retirees are no longer subject to these reductions in their Social Security benefits. Effective for benefits paid in 2022-2026 to those affected by WEP and GPO.
Increasing the minimum benefit for long-term low earners.
Protects long-serving, low-income workers by updating the “special minimum benefit” so that people who worked and paid into Social Security for many years, even at very low wages, can be kept out of poverty by their Social Security benefit. For instance, someone who works 30 years and retires at full retirement age would receive a benefit that is 125% of the poverty line. The new minimum benefit is tied to wage levels to ensure it does not fall behind in future years. Effective in 2022-2026 for individuals who first become eligible for benefits during those years.
Increasing threshold amounts and rate for inclusion of Social Security benefits in income.
Raises the income thresholds above which Social Security must be included in a beneficiary’s income for tax purposes. Social Security benefits are taxed when beneficiaries have other income in addition to their benefits, if their income exceeds certain thresholds. These thresholds are currently $25,000 for individuals and $32,000 for couples; this provision raises the thresholds to $35,000 and $50,000, respectively. Medicare’s Hospital Insurance trust fund, which receives some of the revenue from this taxation, is held harmless. Effective for taxable years 2022-2026.
Increasing benefits for beneficiaries after 15 years of eligibility.
Provides an across-the-board benefit increase for the oldest old and other long-term beneficiaries. The full amount of the increase – 5 percent of the benefit amount for a lifelong average earner – is paid starting with the 20th year after each person’s benefit eligibility began. The increase phrases in during the 16th through 20th year after eligibility. Effective in 2022-2026 for all beneficiaries who have been receiving benefits for more than 15 years.
Endorsed by NARFE and Other Groups
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The National Active and Retired Federal Employees Association (NARFE) has endorsed the legislation stating If the bill were to advance, NARFE would push to expand the provision to apply to federal retirement annuities as well.
Larson’s office says the legislation has nearly 200 cosponsors and has been endorsed by more than 100 advocacy groups.
“For too long, Congress has forsaken its duty to enhance benefits. With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now,” said Larson.
The Senior Citizens League (TSCL) — a nonpartisan seniors group — also endorsed the proposed bill and says while it is not likely to be acted upon this year, TSCL expects there to be a major effort to pass it in 2022.