Social Security Benefits: Certain Important Information On COLA 2011

For the 2nd year in a row people who rely on Social Security wont receive a cost of living raise. This is only the 2nd time since the cost of living adjustment (COLA) was implemented that recipients haven't received an increase.

The reason Social Security benefits will not be revised in 2011 is that inflation has been very low. The whole premise behind the cost of living adjustment is that benefits are revised for inflation thus recipients could keep up with increasing prices. If there's no inflation, there is no need for cost of living increase. The newest inflation numbers published by the Labor Department indicates that prices are lesser than they were in 2009, the last time Social Security benefits were raised.

The COLA in 2009 was the biggest seen in 27 years at 5.8 percent. The raise in 2009 was so large due to gas prices that sky-rocketed in summer of 2008. When gas prices decreased, so did the in general inflation rate. While the government can not decrease Social Security benefits if there's deflation (when prices are reducing), they can decide to not provide a cost of living adjustment raise, that has been the situation for 2010 and looks to be the case for 2011.

Possible Incentive Payment to Help Seniors Who Depend on Social Security Benefits

To aid Seniors who depend on their Social Security benefits to help with living costs, Congress will be voting on a $250 extra payment for Social Security recipients to aid make up for the fact that Social Security benefits will remain unchanged for second year in a row. An update will be provided when the bill has been voted on.

No Social Security COLA Means No Raise in Medicare B Premiums

One silver lining to no cost of living raise is that Medicare Part B premiums wont increase for current enrollees. A little percentage of Medicare Part B participants will pay increased premiums, including people who've Medicare Part B but who're not yet collecting Social Security benefits, people who're considered "high income" and people who're just now enrolling in Part B. But, a "hold-harmless" provision protects existing participants from rate increases if their Social Security benefits don't raise, so no cost of living raise for Social Security recipients also means no Medicare Part B premium raise also.

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