Ohio residents should be aware that every year, the federal government changes the amount of benefits it pays out through the Social Security System to retirees and those who qualify for Social Security Disability. This change, called a “Cost of Living Adjustment” (COLA), is meant to keep the purchasing power of the benefits paid roughly the same year to year. This adjustment began in the mid-1970s due to high inflation rates that were beginning to impoverish many people receiving benefits.
Because the COLA is generally pegged to the inflation rate, the amount of the adjustment varies from year to year. More specifically, it is based on an index compiled by the Bureau of Labor Statistics, which measures the prices of goods and services for basic necessities such as shelter, food,and clothing, as well as modern requirements like medical care, education and energy. To determine what the COLA will be for any given year, the government compares the value of the index for July, August and September to the value it had for the same time period during the preceding year.
This year, once the September report on prices is made official, the COLA is expected to be somewhere in the area of 1.7 percent. Even though the prices of some staple food items, such as eggs, milk and meat, have increased almost 10 percent, a fall in gasoline prices and a relatively low increase in medical care costs have conspired to keep overall inflation rates down.
Unfortunately, some argue that the COLA is not keeping pace with actual costs because beneficiaries of social security benefits tend to spend a high proportion of their income on healthcare. It is estimated that the average benefit amount will increase about $20 per month.
Social Security Disability Insurance protects Ohio residents who have paid into the social security system in case they incur an injury or illness that prevents them from working. The filing process can be complicated, and many times disability claims are denied when the Social Security Administration first adjudicates them. There is, however, a process to appeal such denials, and this can lead to success in obtaining benefits.
Anyone who has the inability to work due to a physical or psychological disability may wish to consider seeking guidance and exploring his or her options with regard to obtaining Social Security Disability Benefits. This could allow them to take appropriate measures to address their situation will preserving their rights and interests.
Source: 13abc.com, “Another year, another small Social Security bump,” Stephen Ohlemacher, Oct. 18, 2014.