WASHINGTON - Social Security benefits for 50 million people will go up 5.8 percent next year, the largest increase in more than a quarter century. The increase, which will start in January, was announced Thursday by the Social Security Administration. It will mean an additional $63 per month for the average retiree.
It's the largest increase since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.
The typical retiree's monthly check will go from $1,090 currently to $1,153.
The increase would have been even higher, but after racing ahead earlier in the year, energy costs fell in both August and September, helping to moderate the overall price gain.
The 5.8 percent rise in the cost of living adjustment is a sharp departure from recent years. The COLA increases have been below 3 percent for all but three of the past 15 years as the Federal Reserve waged a successful campaign to keep inflation under control.
Even with the big increase, the COLA is well below the gains of the late 1970s and early 1980s when the country was in the grips of a decade-long bout of high inflation. The biggest cost of living benefit on record was a 14.3 percent increase in 1980. Social Security benefits have been adjusted every year since 1975.
In one break for most retirees, the cost of living increase will not be eaten up by higher monthly premiums for the part of Medicare that pays for physician services. Because of gains in the Medicare Part B trust fund, that premium will hold steady at $96.40 a month, although higher-income people including couples making more than $170,000 annually will see their premiums increase.
Next year's cost of living increase will go to more than 55 million Americans. More than 50 million receive Social Security benefits while the rest get Supplemental Security Income payments for the poor.
The average couple, both getting Social Security benefits, will see their monthly check go up by $103 a month to $1,876.
The standard Supplemental Security Income payment for a couple will go from $956 per month to $1,011. The SSI payment for an individual will go from $637 per month to $674 per month.
The average monthly check for a disabled worker will go from $1,006 to $1,064
In addition to the cost of living adjustment, the government announced Thursday that the maximum amount of earnings subject to the Social Security tax will increase next year to $106,800, up from $102,000 this year.
Thursday, October 16, 2008
Saturday, October 4, 2008
KOHL-MCCASKILL BILL SPURS GOVERNMENT TO RESOLVE ISSUE OF ILLEGAL GARNISHMENT OF SS BENEFITS
KOHL-MCCASKILL BILL SPURS GOVERNMENT TO RESOLVE ISSUE OF ILLEGAL GARNISHMENT OF SS BENEFITS
Contact: Ashley Glacel - (202) 224-5364
Monday, April 14, 2008
WASHINGTON, D.C. – Today U.S. Senators Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, and Claire McCaskill (D-MO) introduced the Illegal Garnishment Prevention Act, a bill that would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens. With increasing frequency, financial institutions are garnishing or freezing funds on behalf of creditors from bank accounts into which Social Security, Supplemental Security Income (SSI), and Veterans benefits are electronically deposited, despite clear protections in federal law against the garnishment of such benefits.
“Millions of seniors rely on their Social Security benefits as their only source of income for basic needs like housing and food. When financial institutions and creditors illegally withhold these benefit checks, they are putting the lives of our most vulnerable segment of the population at risk. We need to know how wide-spread this practice has become and find a way to make it stop,” Kohl said.
“For many seniors and disabled Americans, social security checks keep them financially afloat from month to month. When banks garnish these funds, they are left with nothing. We need to be very careful to make sure proper safeguards are in place to protect seniors in this situation, and this bill will guarantee they are” McCaskill said.
In most cases, the protected funds are taken not only by the creditor, but also by the bank through the collection of additional fees levied for “processing” the garnishment. These can include overdraft charges or insufficient fund charges, which occur as the result of the garnishment. Some banks have also been found to dip into these protected funds to cover other debts owed to the bank, such as a car loan. Many older Americans rely on Social Security benefits to pay their rent, buy groceries, and afford prescription drugs. For twenty percent of seniors over 65 years old, Social Security is their only source of income and for two-thirds it is the major source of income.
In August 2007, Kohl, McCaskill, and Senator Max Baucus (D-MT) sent a letter to the Social Security Administration’s Inspector General asking him to investigate the increasingly frequent but prohibited method of collecting debt from senior citizens, veterans, and the disabled. The senators requested that the Social Security Administration's Inspector General report to them the degree to which large and small banks are engaged in these practices and the extent to which the resulting fees are eating up the safety net funds upon which seniors, veterans and the disabled rely. It is anticipated that the results of the SSA OIG’s investigation will be released in coming weeks.
“In recent months several newspapers have published articles describing how financial institutions have been freezing and assessing fees on accounts in which Social Security and Veterans' benefits are electronically deposited,” the letter read. “Sadly, the majority of the individuals to whom this is occurring are those who can least afford it.”
In November 2007, Senators Kohl, McCaskill, and Baucus were joined by Senators Chuck Grassley (R-IA), Gordon H. Smith (R-OR), Christopher Dodd (D-CT), Richard Shelby (R-AL), and John Kerry (D-MA) in urging the Director of the Office of Management and Budget, Jim Nussle, to play a role in resolving the matter. The letter requested that Director Nussle implore one or more of the five federal agencies with jurisdiction over America’s financial institutions to issue a necessary rule clarification.
# # #
A link to the August 2007 letter to the SSA OIG can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentssaoig.pdf
A link to the November 2007 letter to the OMB can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentomb.pdf
Contact: Ashley Glacel - (202) 224-5364
Monday, April 14, 2008
WASHINGTON, D.C. – Today U.S. Senators Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, and Claire McCaskill (D-MO) introduced the Illegal Garnishment Prevention Act, a bill that would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens. With increasing frequency, financial institutions are garnishing or freezing funds on behalf of creditors from bank accounts into which Social Security, Supplemental Security Income (SSI), and Veterans benefits are electronically deposited, despite clear protections in federal law against the garnishment of such benefits.
“Millions of seniors rely on their Social Security benefits as their only source of income for basic needs like housing and food. When financial institutions and creditors illegally withhold these benefit checks, they are putting the lives of our most vulnerable segment of the population at risk. We need to know how wide-spread this practice has become and find a way to make it stop,” Kohl said.
“For many seniors and disabled Americans, social security checks keep them financially afloat from month to month. When banks garnish these funds, they are left with nothing. We need to be very careful to make sure proper safeguards are in place to protect seniors in this situation, and this bill will guarantee they are” McCaskill said.
In most cases, the protected funds are taken not only by the creditor, but also by the bank through the collection of additional fees levied for “processing” the garnishment. These can include overdraft charges or insufficient fund charges, which occur as the result of the garnishment. Some banks have also been found to dip into these protected funds to cover other debts owed to the bank, such as a car loan. Many older Americans rely on Social Security benefits to pay their rent, buy groceries, and afford prescription drugs. For twenty percent of seniors over 65 years old, Social Security is their only source of income and for two-thirds it is the major source of income.
In August 2007, Kohl, McCaskill, and Senator Max Baucus (D-MT) sent a letter to the Social Security Administration’s Inspector General asking him to investigate the increasingly frequent but prohibited method of collecting debt from senior citizens, veterans, and the disabled. The senators requested that the Social Security Administration's Inspector General report to them the degree to which large and small banks are engaged in these practices and the extent to which the resulting fees are eating up the safety net funds upon which seniors, veterans and the disabled rely. It is anticipated that the results of the SSA OIG’s investigation will be released in coming weeks.
“In recent months several newspapers have published articles describing how financial institutions have been freezing and assessing fees on accounts in which Social Security and Veterans' benefits are electronically deposited,” the letter read. “Sadly, the majority of the individuals to whom this is occurring are those who can least afford it.”
In November 2007, Senators Kohl, McCaskill, and Baucus were joined by Senators Chuck Grassley (R-IA), Gordon H. Smith (R-OR), Christopher Dodd (D-CT), Richard Shelby (R-AL), and John Kerry (D-MA) in urging the Director of the Office of Management and Budget, Jim Nussle, to play a role in resolving the matter. The letter requested that Director Nussle implore one or more of the five federal agencies with jurisdiction over America’s financial institutions to issue a necessary rule clarification.
# # #
A link to the August 2007 letter to the SSA OIG can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentssaoig.pdf
A link to the November 2007 letter to the OMB can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentomb.pdf
Unbanked Americans Prepaid Debit Cards
Comerica Bank Named as Card Issuer
Washington, D.C. - (Jan. 4, 2008) - The U.S. Department of the Treasury's Financial Management Service (FMS) has designated Comerica Bank as its financial agent in a new initiative to give millions of unbanked Americans the option of using a prepaid debit card for receiving Social Security and other federal benefit payments. The "Direct Express®" card provides a safer and more convenient alternative to paper checks. Comerica Bank was selected, in part, because of its experience as a prepaid card issuer for millions of benefit recipients, particularly for state government programs.
"Direct Express represents a significant step forward in the evolution of federal benefit payments," said FMS Commissioner Judy Tillman. "The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds, at low or no cost to the cardholder. We ultimately would like to see an all-electronic Treasury - with all the security, efficiency and cost savings that would entail. This card takes us closer to that goal by combining the best in payment innovation with sound public policy. If every unbanked federal check recipient signed up to use the card, it would save taxpayers about $44 million per year."
The Treasury estimates that four million Social Security and Supplemental Security Income (SSI) check recipients do not have bank accounts, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems, such as lost or stolen checks. In fact, nine times out of 10, problems with Social Security payments are linked to paper checks, not direct deposit.
Financial Flexibility and Security
The Direct Express card will be introduced in spring 2008 and will be phased into national distribution by the end of the summer. Direct Express card holders will benefit from improved financial flexibility and security as compared to paper check recipients.
Each month, payments will be automatically deposited on the Direct Express card account on the federal beneficiary's designated payment day - which means people will have faster access to their money than they would if they had to cash a paper check. Card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, these accounts are PIN-protected, FDIC-insured, and subject to federal consumer protection regulations (Regulation E).
"Millions of federal beneficiaries remain outside the banking system, which means they don't have access to payment methods that most Americans take for granted, such as getting cash at an ATM or paying with a card at a store," said Nora Arpin, Director of Government Electronic Solutions for Comerica Bank. "The Direct Express card provides an opportunity for people outside of the banking system, either because of personal choice or perhaps their inability to obtain a bank account, to gain a foothold in the financial mainstream."
The Treasury has already experienced significant success in increasing electronic payments with its Go Direct campaign, which is aimed at motivating banked federal benefit recipients to switch from paper checks to direct deposit. To date, Go Direct has achieved more than 1.6 million direct deposit conversions.
"Direct Express" is a registered trademark of the U.S. Department of the Treasury, Financial Management Service.
Last Updated: Thursday January 03, 2008
Washington, D.C. - (Jan. 4, 2008) - The U.S. Department of the Treasury's Financial Management Service (FMS) has designated Comerica Bank as its financial agent in a new initiative to give millions of unbanked Americans the option of using a prepaid debit card for receiving Social Security and other federal benefit payments. The "Direct Express®" card provides a safer and more convenient alternative to paper checks. Comerica Bank was selected, in part, because of its experience as a prepaid card issuer for millions of benefit recipients, particularly for state government programs.
"Direct Express represents a significant step forward in the evolution of federal benefit payments," said FMS Commissioner Judy Tillman. "The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds, at low or no cost to the cardholder. We ultimately would like to see an all-electronic Treasury - with all the security, efficiency and cost savings that would entail. This card takes us closer to that goal by combining the best in payment innovation with sound public policy. If every unbanked federal check recipient signed up to use the card, it would save taxpayers about $44 million per year."
The Treasury estimates that four million Social Security and Supplemental Security Income (SSI) check recipients do not have bank accounts, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems, such as lost or stolen checks. In fact, nine times out of 10, problems with Social Security payments are linked to paper checks, not direct deposit.
Financial Flexibility and Security
The Direct Express card will be introduced in spring 2008 and will be phased into national distribution by the end of the summer. Direct Express card holders will benefit from improved financial flexibility and security as compared to paper check recipients.
Each month, payments will be automatically deposited on the Direct Express card account on the federal beneficiary's designated payment day - which means people will have faster access to their money than they would if they had to cash a paper check. Card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, these accounts are PIN-protected, FDIC-insured, and subject to federal consumer protection regulations (Regulation E).
"Millions of federal beneficiaries remain outside the banking system, which means they don't have access to payment methods that most Americans take for granted, such as getting cash at an ATM or paying with a card at a store," said Nora Arpin, Director of Government Electronic Solutions for Comerica Bank. "The Direct Express card provides an opportunity for people outside of the banking system, either because of personal choice or perhaps their inability to obtain a bank account, to gain a foothold in the financial mainstream."
The Treasury has already experienced significant success in increasing electronic payments with its Go Direct campaign, which is aimed at motivating banked federal benefit recipients to switch from paper checks to direct deposit. To date, Go Direct has achieved more than 1.6 million direct deposit conversions.
"Direct Express" is a registered trademark of the U.S. Department of the Treasury, Financial Management Service.
Last Updated: Thursday January 03, 2008
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