Social Security Sending Corrected Benefit Notices

The Social Security Administration earlier this month mailed notices that contained incorrect January 2010 payment dates. These erroneous notices went to about 6 million beneficiaries who receive their payments on either the second, third, or fourth Wednesday of each month, and are part of the annual benefit notices that go to 52 million Social Security beneficiaries. In the notice the payment date is incorrectly shown as one week before what the actual date of payment will be. The other information in the notice, including the payment amount, is correct. Social Security is sending a letter explaining the error to beneficiaries who received the incorrect one as soon as possible.

“We apologize for the inconvenience and confusion these incorrect notices will cause,” said Michael J. Astrue, Commissioner of Social Security. “The problem was caused by an unfortunate human error. We are correcting the misinformation as quickly as possible, and we are reviewing our processes closely to prevent this type of mistake from happening in the future. People receiving Social Security benefits in January 2010 should know that their payment will arrive on the same payment day that it has arrived in the past.”

Social Security and Supplemental Security Income Benefits Won’t Automatically Increase in 2010.

With consumer prices down over the past year, monthly Social Security and Supplemental Security Income benefits for more than 57 million Americans will not automatically increase in 2010.  This will be the first year without an automatic Cost-of-Living Adjustment (COLA) since they went into effect in 1975.

“Social Security is doing its job helping Americans maintain their standard of living,” Michael J. Astrue, Commissioner of Social Security said.  “Last year when consumer prices spiked, largely as a result of higher gas prices, beneficiaries received a 5.8 percent COLA, the largest increase since 1982.  This year, in light of the human need, we need to support President Obama’s call for us to make another $250 recovery payment for 57 million Americans.”

The Social Security Act provides that Social Security and Supplemental Security Income benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year to the third quarter of the current year.  This year there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009.  In addition, because there was no increase in the CPI-W this year, under the law the starting point for determinations regarding a possible 2011 COLA will remain the third quarter of 2008.

Some other changes that would normally take effect in January 2010 based on the increase in average wages also will not take effect, even though average wages did increase.  Since there is no COLA, the statute prohibits an increase in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts.  These amounts will remain unchanged in 2010.  The attached fact sheet provides more information on 2010 Social Security changes.

Information about Medicare changes for 2010, when available, will be found at  www.Medicare.gov.  The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2010.  Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects about 93 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit.  Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2010.  On September 24th, the House passed legislation by 406-18 that would, on a fully paid-for basis, prevent abnormally large premium increases.  The President is calling on the Senate to enact this legislation before it becomes too late for the Social Security Administration to update its computer systems to implement this needed change.

For additional information about the 2010 COLA, go to  www.socialsecurity.gov/cola.