Frequently Asked Questions
Frequently Asked Questions
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Why haven’t the income thresholds for the tax on Social Security benefits been adjusted?
Some policy experts say that fixing the income thresholds was the intention of Congress. But the record is not clear. In 1984, the tax was estimated to affect roughly 10 percent of the highest-income Social Security recipients. In fact, a review of the news archives of the time suggest that the new tax on benefits was sold to the public as affecting the wealthiest Social Security recipients. Today the tax can affect roughly 50 percent or more of all Social Security recipients. Had the income thresholds been adjusted for inflation since 1984, the $25,000 level would be about $72,660, and the $32,000 level would be
$93,000. TSCL supports legislation that would adjust these income thresholds.
Will prices come down in 2023?
Consumer price data through September of 2022 suggests that the rate of price increases gives no clear sign that inflation is abating yet. So far, there’s no indication that inflation will disappear like a popping balloon. Snarled supply chains have caused high demand, and inflation in virtually every industry has driven up costs, and the geo/political tensions in Eastern Europe and elsewhere show little sign of abating.
Economists expect those supply problems to eventually resolve and inflation to fall back to normal range in 2023 and thereafter.
Why am I being taxed on my Social Security benefits?
During working years, Social Security payroll taxes are withheld from all earnings up to the taxable maximum which is $137,700 in 2020. Then once an individual begins to receive Social Security benefits, a portion of those benefits may be subject to taxation depending on income. This indeed seems like double taxation.
When Congress first made Social Security benefits taxable in 1984, the tax affected less than 10 percent of beneficiaries. It was sold to the public as only affecting high-income retirees. But today more than 50% of retirees pay the tax on Social Security benefits. Unlike income brackets that are adjusted upward every year, the income thresholds that subject benefits to taxation were never adjusted for inflation. Consequently, even taxpayers with the most modest of incomes are affected by the tax today.
Social Security recipients must pay the tax if their modified adjusted gross income, which includes one-half of total gross Social Security income, is $25,000 - $34,000 (single filers) or $32,000 – $44,000 (couples filing jointly). Those who are subject to taxation pay the lesser of 50% of benefit income or the amount of modified Adjusted Gross Income (AGI) more than $25,000. The revenues raised are credited to the Social Security Trust Fund.
The second tier of taxation affects taxpayers with higher incomes of more than $34,000 (single filers) or $44,000 (couples filing jointly). Up to 85% of benefits could be taxable and these revenues are credited to the Medicare Trust Fund.
Proponents of taxing Social Security benefits point to its importance in financing Social Security and Medicare. In 2018 the Social Security Trust Fund received $35.7 billion in revenues from the taxation of benefits while the Medicare trust fund received $25.1 billion.
38 states and the District of Columbia do not levy a state tax on Social Security benefits.
Do you think seniors will ever receive a stimulus or other financial assistance from Congress?
The Senior Citizens League is working extremely hard and putting pressure on Congress to get seniors the $1400 stimulus they deserve. Not surprisingly, we do not see Congressional support, despite repeatedly sending letters to every Congressional office on Capitol Hill telling them that their constituents overwhelmingly support such an effort. We are not giving up, and neither should you! Call your Member of Congress and tell them you need a stimulus now! The COLA is not keeping up with inflation and you need more money in your pocket TODAY.
Is there currently any legislation in Congress that will not count an increase in COLA against SNAP, subsidized housing, and other benefits/assistance seniors receive?
No, there is no legislative action that, if passed, would allow the COLA increase to not be counted in income eligibility for SNAP, subsidized housing, and other benefits/assistance that seniors receive. However, the eligibility income levels do change:
For SNAP income levels, please click here.
For federally funded subsidized house income levels, please click here.
For other federally funded benefits you may be eligible for, please click here.
Why are my other benefits, such as SNAP, and subsidized housing being lowered, terminated, or increased after receiving an increase in COLA?
Virtually all low-income programs such as food stamps, rental assistance, and Medicare Extra Help come with complex eligibility rules and income restrictions that are tied to a percentage of the federal poverty level, such as 100%, 135%, or 150%. If income is right on the borderline, and a high COLA is received, that potentially could cause trims to benefits from programs. Some individuals might lose access to certain low-income benefits altogether because the COLA boosts their income over the limit. The effect tends to be tempered by the fact that the federal poverty level is adjusted for inflation every year as well, using the Consumer Price Index for Urban Consumers (CPI-U). In many years, the CPI-U grows slightly faster than the index used to adjust Social Security benefits, the Consumer Price Index for Urban Wage Earners, and Clerical Workers (CPI-W).
How to find local assistance for seniors?
The best way to find local assistance for seniors in your area is by contacting your local Agency on Aging at the following link: https://eldercare.acl.gov/Public/Index.aspx
Why am I being penalized for enrolling late into Medicare?
Under current law, Medicare is the primary payer at age 65 and if you do not sign up by your Initial Enrollment deadline, you will be penalized with an enrollment late fee. Unless you have similar insurance coverage from an employer. In addition, you would be subject to permanent late enrollment penalties for the rest of your life when you do get around to signing up for Medicare.
Is there a way to get my late Medicare enrollment fee eliminated?
According to Medicare, you can get your Medicare late enrollment fee eliminated through equitable relief. Equitable relief provides relief if you have suffered a financial hardship due to a government error, misrepresentation of program information, delay in Medicare Part B enrollment, premium collection, termination of entitlement, or local emergency or disaster. You may also be entitled to equitable relief if Medicare or your Medicare prescription drug plan owes you a refund.
Another way you are entitled to equitable relief is if you live/lived in an area where the Federal Emergency Management Agency, also known as FEMA, declared a weather emergency or disaster, and this disaster caused you to submit your Part A or Part B enrollment or refusal request late. This relief can mean immediate or retroactive enrollment into Part B, or it can eliminate or reduce a Part B late enrollment penalty.
You will need to contact the Social Security Administration if you feel you qualify for equitable relief.
Are Medicare premium increases tied to the COLA?
The Social Security COLA is provided to protect the buying power of Social Security benefits, but the COLA does not account for Medicare Part B premiums. The annual inflation adjustment is based on the price changes of goods and services used by working adults younger than age 62 (CPI-W) and does not include price changes experienced by retired (CPI-E) and disabled Americans over that age who receive Medicare.
What is the status of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) legislation?
Currently, the legislation is in the House of Representatives where it will, hopefully, be brought forward for a vote. H.R. 82, The Social Security Fairness Act, has overwhelming bi-partisan support. If it is not passed before the end of the 117th Congress, it will have to be re-introduced and we start all over again.
What is the difference between CPI-W and CPI-E?
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to the U.S. Bureau of Labor and Statistics (BLS), the CPI-W is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.
Consumer Price Index for the Elderly (CPI-E). BLS has stated, the CPI-E calculates a research price index called the Consumer Price Index for Americans 62 years of age and older. The CPI-E tends to grow more quickly than the CPI-W in most years because it more accurately accounts for the percentage of income that retirees spend on healthcare and housing costs. Those two categories tend to increase several times faster than inflation and tend to take a bigger share of retiree income.
Do you know of any resources that will provide free legal aid to seniors?
For legal aid assistance, you can check out the Legal Services Corporation (LSC). LSC is an independent nonprofit established by Congress in 1974 to provide financial support for civil legal aid to low-income Americans.
Eldercare also provides resources for legal assistance for seniors on identity theft, helping seniors navigate financial choices, as well as easy-to-understand guides.
Sometimes I can only afford one meal a day, what resources do you recommend for food assistance for seniors?
Feeding America is a great place to start when looking for food assistance. They have information on local food pantries, meals on wheels, and senior mobile pantries, to name a few. Please click on the following link to get started: Senior Food Programs
Will Medicare ever provide coverage for preventive care for dental work, e.g., cleanings, and fillings?
TSCL advocates for legislation that, if passed, would provide dental care and vision care as part of Medicare benefits. Currently, they are not covered.
How is the COLA calculated?
The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which surveys the costs of goods and services used by younger working adults who spend a significantly lower portion of their income on healthcare than older adults do. Even worse, the CPI-W only includes the costs of households with people who are still working and under the age of 62. Most people do not even qualify for Medicare until age 65.
Many seniors do not have children or relatives. Do you know of any resources that will help manage their affairs after they are no longer able to do so?
Steps that should be taken when it comes to managing future affairs when you have no relatives:
Assess your situation and make a list of your concerns – Such as a house, investments, bank account(s), pension, other retirement funds, a will, charities, burial, or cremation, etc. You should also think about what you want to do with your bank accounts, as well as thinking about if you would like to go into assisted living.
Get with a financial planner - Take your list of concerns and let your financial planner help guide you toward a less stressful retirement.
Why do you ask for a donation, if the seniors you advocate for are already on limited income?
Our organization is funded solely through donations, which is why a request for a donation is made in all the mailings. We are extremely passionate about the work we do, and we truly wish we could do it for free. But, as you know, postage, rent, and about everything else continue to go up, so donations are necessary if we are to continue advocating on behalf of America’s senior citizens. Please do not donate if it is going to be a financial hardship...we cannot stress that enough. If you receive a petition or survey from us, please send that back to us as it is extremely helpful in our lobbying efforts.
How can I get involved politically in my local community?
- Attend town hall meetings
- Connect with local representatives
- Join a local board or commission
- Volunteer on a political campaign
- Run for office in your community
- Become a community organizer
- Volunteer at polls and encourage others to vote
Does The Senior Citizens League (TSCL) have local chapters?
The Senior Citizens League does not have local chapters.
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