Recently we received the following from one of our readers:
Please tell me how long your organization has been working on the Notch legislation with Congress. We are 84 to 93 years old. How many Notch Babies are still alive to benefit from this legislation?
Notch Reform is one of the core issues of TSCL. We are the only major non-partisan senior issues advocacy organization that remains committed to working for legislation that would provide a lump-sum, or higher benefits, to people affected by the Social Security Notch. TSCL has continuously done so since the organization was founded in 1994.
The Notch refers to a major inequity in Social Security benefits affecting seniors born from 1917 through 1926. Based on Social Security statistics through December 2010, there are 5.5 million retirees, spouses, and widow(er)s who were born during those years.
Notch Babies continue to receive lower benefits compared to other seniors having similar earnings histories. For example: In 2010, someone born in 1916 received an average monthly benefit of $1,310. Retirees born just five years later in 1921 received an average monthly benefit of $1,148 — that’s $1,944 less in 2010 than people born in 1916.
How did this happen? In order to avert a Social Security funding crisis in 1977, Congress cut benefits by changing the benefit formula. The legislation took effect almost immediately, first affecting people born in 1917 who became eligible for benefits just two years later in 1979. In order to phase-in the legislation, and to prevent a sharp drop in benefits of those close to retirement age, Congress provided a transitional benefit formula. But that transitional benefit formula failed in providing the promised protection from sharp benefit reductions. Economic turmoil at the time exacerbated differences in benefits.
TSCL has been instrumental in building support for Notch Reform legislation among Members of Congress for more than 16 years. In the fall of 1994, TSCL first proposed the one-time $5,000 Settlement to Notch Babies. Legislation providing the settlement was first introduced in 1996, and in every subsequent Congress since that time.
Through TSCL’s mailings to millions of Notch Babies nationwide, the “Notch Fairness Act,” which would provide a $5,000 settlement payable for four years, or an improved monthly benefit, receives widespread bipartisan support in both the House and the Senate. Members of Congress have repeatedly told us that the best chances for passage of Notch Reform would be with overall Social Security reform.
That time is upon us now. We thank all of you for your support and remain committed to seeing through Notch Reform.