Notch Bulletin: July 2011

Notch Bulletin: July 2011

I am writing for assistance in applying for the Notch Settlement on behalf of my widowed mother who has been a supporter of this cause for several years.

Recently we received the following from one of our readers:

I am writing for assistance in applying for the Notch Settlement on behalf of my widowed mother who has been a supporter of this cause for several years.  She currently draws my deceased father's Social Security since it is greater than what she would receive under her own amounts paid in.  My father was born on Sept. 16, 1926, which would qualify her to receive the settlement of $5,000.  She also has an acquaintance who was in this same situation and she was able to obtain the $5,000 in full under her husband's benefits and he was also born in 1926.  We have made several attempts to contact Social Security and they simply will not respond to her request.  Is there any assistance you may lend to resolve this issue?

It sounds as though either your mother, or her acquaintance, received some incorrect information.  “The Notch Fairness Act,” legislation that would provide Notch Babies born 1917 through 1926 with a settlement of $5,000, or a higher monthly benefit, has not yet passed.  No doubt that’s why the Social Security Administration did not respond to your mother’s request.  It is correct that widows or widowers receiving benefits on the account of a Notch Baby would be entitled to the $5,000, or the higher monthly benefit if the legislation is enacted.

Be wary of the information from this acquaintance, and any claim that she has obtained the $5,000.  While it may be a simple misunderstanding, be careful of scams.  Make sure your mom knows she should never give out her Social Security number over the phone to anyone or to anyone you meet who says that it’s required in order to receive the $5,000 settlement.

TSCL is continuing to meet with Members of Congress to ask for their support and passage of “The Notch Fairness Act” which was recently re-introduced in the U.S. House by Representative Mike McIntyre (D-NC), and in the Senate by Senator David Vitter (R-LA).  The legislation, seeks to correct a disparity in benefits caused the last time Congress overhauled the Social Security benefit formula in 1977.

Just as today, in 1977 the federal budget was in deficit, and Social Security was facing a funding crisis.  The new benefit formula changes first affected seniors who turned 62 in 1979 just two years later.  Seniors born from 1917 through 1926 wound up receiving lower benefits than other retirees with almost identical work and earnings records.  Although reductions of about 10 percent for average earners were expected at the time of the changes, Notch babies were often affected by disparities of 20 percent or more, because a phase-in benefit formula failed.

In 1988, a report by the former U. S. General Accounting Office, now the Government Accountability Office (GAO), cited an example of two sisters who started working at the same book bindery, on the same day, in October 1957.  Audrey was born in March 1916, and Edith in June of 1917.  The two had almost identical lifetime earnings.  The younger sister Edith (born 1917) received a monthly benefit of $512.60, $111.80 less than her older sister Audrey (born 1916), who received $624.40 per month.

According to studies performed for TSCL, many Notch Babies, particularly those who rely on Social Security for most, if not all, of their income, are at risk for living near or below the federal poverty level.  For example, Notch Babies who retired in 1984 at age 65 with average benefits of $460 per month, would receive about $11,839 this year.  In the 48 contiguous states and Washington DC, that’s only 8% above the federal poverty guidelines and qualifies for various assistance programs.

Support for Notch Reform legislation has grown significantly, nearly doubling over the previous six Congressional sessions in which it’s been introduced.  TSCL is encouraging seniors and their younger family members like you to contact your Members of Congress and urge them to co-sponsor and pass “The Notch Fairness Act, ” H.R. 1001 and S. 118!