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Lawmakers Want Permanent Link for COLA and Social Security Increases

cola

By Debbie Gregory.

In an effort to ensure that veterans continue to receive the same annual cost-of-living increase as Social Security recipients, lawmakers are pushing for legislation that would permanently tie the two rate increases together.

The house has already adopted the “American Heroes COLA Act,” which provides an automatic cost-of-living adjust for benefits such as disability compensation and living allowances.

The purpose of COLA is to ensure that the purchasing power of Social Security and SSI benefits is not eroded by inflation.

COLA is determined each year by the Social Security Administration based on inflation over the previous year. In particular, SSA looks at uses a measure called the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers, which looks at price changes of a “basket” of goods and services to determine the rate of inflation. The CPI-W is calculated by the Bureau of Labor Statistics, and measures the prices of food, clothing, housing, transportation, medical care, recreation, education, and many other goods and services.

There are those who argue that the CPI-W is not an accurate measure of inflation’s impact on seniors, and that the Consumer Price Index – Elderly (CPI-E) should be used instead. The CPI-E is a measure that gives greater weight to goods and services, such as medical care, used disproportionately by seniors.

Under the current law, annual increases are automatic for Social Security benefits. But veterans benefits fall into a different category, requiring lawmaker intervention each year.

The bill is sponsored by Rep. Ralph Abraham (R-LA). He and other lawmakers cite congressional infighting in recent years as justification for the law, discord which has resulted in the sidelining of other legislation that was assumed routine. Making the veteran benefits increases automatic avoids that pitfall.

Last year, because of a drop in consumer prices, neither veterans nor Social Security recipients saw an increase in their payouts

The bill would not affect adjustments for military retirement pay, which are calculated through other methods.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.

Facts About Social Security and Your Military Service

retirement

By Debbie Gregory.

Did you know you can receive both Social Security benefits and military retirement? Under most circumstances, there is no reduction of Social Security benefits because of your military retirement benefits. You’ll get your full Social Security benefit based on your earnings.

Since 1957, if you had military service earnings for active duty (including active duty for training), you paid Social Security taxes on those earnings. Since 1988, inactive duty service in the Armed Forces reserves (such as weekend drills) has also been covered by Social Security. If you served in the military before 1957, you did not pay Social Security taxes, but you are given special credit for some of your service.

During your service, you pay Social Security taxes just the same as civilians do. In order to qualify for benefits, you must have worked and paid Social Security taxes for at least ten years, including your civilian employment.

Your benefit amount depends on your earnings, averaged over your working lifetime. So, for the most part, the higher your earnings, the higher your Social Security benefit will be.

When you apply for Social Security benefits, you will be asked for proof of your military service (DD Form 214) or information about your reserve or National Guard service. In addition to providing retirement benefits, Social Security benefits are paid out to you and your family if you become disabled. Social Security pays survivors benefits to your family when you die.

While you can retire as early as age 62, your Social Security benefits will be permanently reduced. If you delay applying for benefits until your full retirement age, you can work and still get some Social Security benefits, but when you reach your full retirement age, you can get all of your Social Security benefits regardless of your income.

For more information, visit Social Security online or call the Social Security office toll-free at 1-800-772-1213 from 7 a.m. to 7 p.m., Monday through Friday. The TTY number for the deaf and hard of hearing is 800-325-0778.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.