Social Security recipients can see an additional $159 in their monthly checks, according to the latest estimates.
Experts predict a cost of living adjustment (COLA) of 9.3% to 10.1%.
The US Bureau of Labor Statistics said on Wednesday that inflation rose 8.5% through July — up from 9.1% in June.
When rates go up, Social Security recipients get a benefit boost to help them keep up, which means that’s not necessarily good news.
The COLA is dependent on the consumer price index for city employees (CPI-W) in the third quarter.
The latest data for the month of July means COLA could be 9.6% in 2023, the Senior Citizens League (TSCL) has estimated.
Because inflation has such a strong impact on this number, it could go up or down.
If the rate increases, the COLA could be 10.1%, but if it continues to decrease, the adjustment could be 9.3%.
Mary Johnson, Social Security and Medicare Policy Analyst at TSCL, said it would increase the average retiree benefit by $158.98 per month from $1,656.
However, this may not be enough.
Ms Johnson told The Sun that this benefit would average $58 a month and $373.80 a year.
Increases are to come into effect in December 2022, and new benefits are to be paid out from January 2023.
The COLA is also awarded to Supplemental Security Income (SSI) applicants.
The current average is $621 per month while the maximum is $841.
If COLA hits 9.6%, the average payments would increase by about $60 to $681, and the maximum would increase by a little over $80 to $921.
Negative effects of high COLA
Benefit increases are not always welcomed, as some of them can push people beyond the income limit required for other assistance programs.
A study conducted by TSCL from May to July showed that 14% of participants had their support for low-income earners reduced because of their COLA.
Another 6% had lost access to one or more programs when COLA increased their income beyond the allowable limit.
In another survey, 37% of respondents said they would receive low-income support in 2021.
This is more than double the 16% who received this aid before the pandemic.
These results suggest that the pandemic and inflation have caused a significantly higher number of adults living on a fixed income to turn to other supplementary programs.
The Anti-Inflation Act
Ms Johnson shared her excitement at the new measures to combat high drug prices being included in the law.
The bill, passed by the Senate in recent days, will cut drug prices by nearly $300 billion over 10 years.
This will translate into savings for taxpayers and Medicare beneficiaries who have to shell out their share of the high cost of prescription drugs.
Ms Johnson said: “The cancer of prohibitive drug prices is responsible for financial hardship, declining health and has even killed some older Americans who today do not have enough resources to pay the price of their prescription drugs.”
She added that this legislation has strong support from TSCL.
The law is scheduled to be debated in the House of Representatives later this week.
Keep up to date with all COLA news by following our blog.
Also, see why millions of Supplemental Security Income claimants will receive two checks in September.
https://www.the-sun.com/money/5970237/millions-americans-social-security-checks-cola-2023-estimate/ Millions of Americans are lined up for an additional $159 in monthly Social Security checks under the new 2023 COLA estimate