The Social Security Administration (SSA) has recently announced a 3.2% increase in benefits for 2024, impacting about 71 million Americans.
While this may seem like a modest bump compared to last year’s 8.7%, there’s buzz about a possible 20.6% increase due to backpay adjustments. Let’s dive into what this means and whether there’s any truth to these speculations.
20.6% Raise To Social Security, SSI, SSDI, and VA Benefits
Backpay is essentially money owed to employees or beneficiaries that should have been paid earlier. For Social Security, SSI, SSDI, and VA benefits, backpay could mean catching up on underpayments from previous years. However, the idea of a 20.6% raise tied to backpay is largely speculative.
In 2023, the SSA implemented an 8.7% cost-of-living adjustment (COLA) due to high inflation. Now, in 2024, a 3.2% increase has been announced.
Some people are speculating that there could have been an additional 17.4% increase in 2023, which, when combined with the 3.2% for 2024, would total a 20.6% raise. But is this realistic?
The Real Numbers
The SSA’s COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). In 2022, the average CPI-W was 291.901, which rose to 301.236 in 2023. This increase of around 3.2% led to the 2024 COLA adjustment.
However, there’s no official word from the government or the SSA on any backpay adjustments that would lead to a 20.6% increase.
While some argue that beneficiaries deserve more due to the higher inflation rates in 2022, the SSA has not indicated that it will compensate for the previous year’s perceived shortfall.
The 3.2% increase is what beneficiaries can expect in 2024, with no current plans for additional backpay.
SSI and SSDI Updates
Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) recipients will also see the 3.2% increase starting in December 2023.
Around 7.5 million SSI recipients will get a bump in their monthly payments, which will slightly ease the burden of inflation.
One significant change is the increase in maximum taxable earnings subject to Social Security tax, which rises from $160,200 to $168,600.
This means higher-income earners will contribute more to the Social Security system, possibly aiding in future COLA adjustments.
VA Benefits: What’s Changing?
Veterans receiving VA benefits will also experience the 3.2% COLA increase. While the raise might not seem substantial, it helps keep up with rising living costs.
VA benefits are tied to the same inflation metrics as Social Security, so veterans can expect similar adjustments.
Just like with Social Security, there’s no confirmation of any backpay adjustments for VA benefits. The 20.6% increase remains hypothetical and isn’t something beneficiaries should count on.
The Bottom Line
Despite the hype, the SSA’s official stance is that beneficiaries will see a 3.2% increase in 2024, and there’s no indication of a 20.6% backpay adjustment.
The COLA adjustments are based on specific economic indicators, and while they aim to keep up with inflation, they don’t always reflect the full cost-of-living increases that many beneficiaries feel.
For the most accurate and up-to-date information, it’s essential to monitor official SSA announcements and be cautious of speculation. While everyone would appreciate a more significant increase, the current adjustments are what’s on the table.
FAQs
Will there be a 20.6% increase in Social Security benefits?
No official announcement has been made about a 20.6% increase.
How much will Social Security benefits increase in 2024?
Benefits will increase by 3.2% in 2024.
Is backpay likely for Social Security recipients?
There’s no indication of backpay being issued for 2024.
How is COLA calculated for Social Security?
COLA is based on the CPI-W from the previous year.
What’s the new maximum taxable earnings for Social Security?
The new limit is $168,600 for 2024.
