My dad claims that it is in part, due to the fact that the adjustment was advanced to them with a check.
I am aware that concept did apply to the stimulus credit that went to most taxpayers based on their income and family size. If you got a check, it reduced the credit that you would have received on your 2009 tax return.
I’m also aware that social security recipients would not have received a check based on the original plan. It was later changed to give them checks even if they didn’t have other income or file tax returns. I can imagine that in making this change the legislators agreed to factor that into future COLA increases and reduce them accordingly.
So is the lack of an increase based solely on the COLA index or is that stimulus check a factor too?
As far as I know, the lack of an increase is based solely on the COLA index. I’m a Federal retiree, and I’m not getting an increase either. Which I’m not happy about, because I know that my health insurance costs are going to be going up, which means I’ll be getting less money.
I don’t understand the part of your post that I quoted. Social security recipients did receive checks based upon the original plan. (Why else have the Act?) It was amended recently to allow for retirement benefits (“old-age insurance benefits” in government-speak) even if you are not retired and without any offset. Until recently, if you continued to engage in substantial gainful activty once your reached full retirement age (which was 65 at the time), your retirement benefits would be offset. Everybody with any income must file a tax return, whether or not you must pay taxes.
Each year, the amount of the benefits is increased according to the COLA index. I believe that in some past years, the benefits were increased a minimal amount above the COLA index. Next year, there will be no increase, and the government figures that the stimulus checks should make all the retirees happy without any increase.
I’ve assumed when you say “social security recipients” you are referring only to retirement benefits, and not later enacted laws allowing for Supplemental Security Income or Disability Benefits.
The answer is “no”. The stimulus check was the stimulus and teh lack of COLA is due to the lack of wage growth / inflation in the rest of the economy. There is no connection legislatively or logically.
Other than that, is some sense, they both flow from a poor economy.
