Bill in Congress seeks to keep Social Security recipients out of poverty

0

Image source | Getty Images

First, it would update what is called the special minimum benefit – a floor for low incomes – to 100% of the current poverty level. This would apply to people who have contributed to social security for at least 30 years and who claim benefits when they reach full retirement age (typically 66 or 67, depending on their date of birth). Benefits would be adjusted so that workers with at least 10 years of work but less than 30 would also qualify.

In addition, Moore is asking that the child care credits be applied to future eligibility for the Parents of Children Under 6 program. These parents would receive a credit for each year a child under that age is at home, up to a maximum of five years. This time would count towards the 30 years required for the special minimum benefit.

The bill also proposes to increase monthly checks by 5% for all beneficiaries once they have been retired for 20 years. This increase would be phased in once the beneficiaries have reached 16 years of eligibility.

Student benefits would be expanded for children of deceased and disabled workers so that they can continue to collect money until the age of 26 as long as they are students in college or vocational schools. Currently, benefits are only paid for children up to the age of 18.

Moore’s plan also calls for changes to help pay for expanded benefits.

This includes the phasing out of the Social Security payroll tax ceiling, which currently only applies to salaries up to $ 142,800.

At the same time, the plan also plans to gradually increase the rate at which employers and employees pay this tax to 6.5%, from the current 6.2%, over six years.

“My proposal would help us ensure that Social Security does what it was supposed to do: protect all older Americans from spending retirement living in extreme poverty,” Moore said in a statement.

The challenges of social security reform

zimmytws | iStock | Getty Images

Other Social Security proposals from Democrats have also sought to establish a minimum benefit to help keep people out of poverty.

This includes five of the platforms of the Democratic presidential candidates from the last election: President Joe Biden, Transportation Secretary Pete Buttigieg, Senator Amy Klobuchar from Minnesota, Senator Bernie Sanders from Vermont and Senator Elizabeth Warren from Massachusetts. .

These plans were more fleshed out than those in the previous presidential election, where Hillary Clinton’s platform was limited to establishing credits for caregivers, said Karen E. Smith, senior researcher at the Urban Institute, a group Washington, DC Reflection Center.

Representative John Larson, D-Conn., Also introduced a bill to increase benefits.

Notably, these other proposals mostly set the minimum benefit at 125% of the federal poverty line, rather than 100%.

However you want to redistribute benefits, you can eliminate poverty while ensuring that future cohorts end up with higher benefits than current recipients.

Karen E. Smith

principal researcher at the Urban Institute

One problem with the proposals is how well they actually tackle poverty, Smith said. For example, only new beneficiaries could have access to the higher minimum benefits. At the same time, if a 20-year increase is put in place, it could be skewed in favor of higher-income people as they tend to live longer, she said.

While these plans provide increased benefits for some beneficiaries, they also aim to address the program’s solvency issues, albeit to varying degrees.

Because Social Security trust funds have about 10 years left – at that point the benefits will be cut – “they have to deal with it,” Smith said of the Washington executives.

“This is really a debate in Congress that we need to have that hasn’t happened,” Smith said.

Meanwhile, measures to eradicate poverty can be taken at relatively low cost.

“However you want to redistribute benefits, you can eliminate poverty while ensuring that future cohorts end up with higher benefits than current recipients,” Smith said.

Admittedly, the adoption of social security legislation in the near future may be out of reach.

But another change – reforming the Supplemental Security Income benefits – would be easier for Congress to pass now and inevitably help the poor those benefits target, Smith said.

In 2021, the maximum monthly SSI benefit is $ 794 per person, or $ 1,191 per married couple when both people are eligible for the program.

A Senate bill calls for increasing these monthly benefits to 100% of the federal poverty level, which would result in a 31% increase in income.

“The increase in SSI benefits really helps the poor,” Smith said. “It would be a big improvement.”


Source link

Leave A Reply

Your email address will not be published.