In the past, when we have talked about the cost-of-living adjustment, or COLA for short, good news often followed for some of our New Jersey readers. As you may know, government programs such as Supplemental Security Income are affected by the Consumer Price Index. By adjusting the COLA, the government can ensure that the benefits received through SSI are not cancelled out by inflation.
In years past, nearly 64 million Americans were happy to hear the Social Security Administration's announcement regarding the COLA adjustment. That's because, in the past, the announcement oftentimes meant an increase in benefits. But according to the trustees in charge of the disability fund, time and funds are running out. If Congress doesn't act soon, the fund will be depleted by the last quarter of 2016. This means a cut in benefits as well as the strong possibility of no COLA increase next year.
If you've been following the news like we have regarding disability benefits, then the news we've just presented is hardly shocking. It's been known for more than a year that the disability trust was giving out more money than it was taking in. But despite urges from some lawmakers to tap into the retirement trust fund, Republicans in Congress have been unwilling to compromise to find a solution to the problem.
So what will this mean for our West Caldwell readers? If Congress doesn't act before the last quarter in 2016, the revenue generated for the disability trust will only be enough to cover 81 percent of scheduled benefits. This means that benefits will need to be reduced by 19 percent in order to cover the roughly 11 million beneficiaries currently receiving disability insurance.
If you're receiving SSI then you know how modest these benefits are to begin with. A cut due to Congress' inaction could put many individuals and their families in a precarious situation, which is why many people across New Jersey and the nation hope a solution is found and soon.
Source: The New York Times, "Social Security Disability Benefits Face Cuts in 2016, Trustees Say," Robert Pear, July 22, 2015