Raising Social Security benefits is a change which would be welcomed by beneficiaries. Nearly 70 million Americans receive Social Security payments, and a majority of these recipients rely on the payments to cover their monthly expenses. Because of this, an increase in payments is most certainly not to be turned down by beneficiaries. In a new survey by the National Academy of Social Insurance, two groups of Social Security beneficiaries have support to have their benefits be raised.
Social Security providing a lifeline for Americans
Social Security benefits are an essential lifeline for its benefits. With the average recipient receiving just under $2,000 per month, and a majority of recipients relying on these payments to cover at least 50% of their payments, these payments are essential in keeping beneficiaries out of destitution. With this new survey by the National Academy of Social Insurance, the raise in benefits would be a significant help.
However, raising the benefits of specific beneficiaries comes at a time when the longevity of the Social Security fund is under threat. Currently the retirement fund is set to be depleted by 2033. This would mean that beneficiaries would have their payments reduced by 21%, unless congress acts to extend the longevity of the fund. Currently, the suggested solutions are to increase Social Security taxes or to reduce benefits now.
Survey highlights extending benefits for vulnerable groups
Despite concerns on the longevity of the fund, a survey by the National Academy of Social Insurance highlighted how participants have support for increasing the benefits for the the following beneficiaries:
- Caregiving credit for parents: The first group which has major support is the introduction of a caregiving credit for individuals who need to stop working in order to care for children under the age of six. As it stands, fulltime caregivers often receive significantly lower Social Security benefits because their earnings history is interrupted due to needing to take time out of working to care for children. In additon, these disproportionately affects women, as mothers are more likely to be the primary caregiving roles. If this credit was approved, it would ensure that the primary caregiver does not lose out on their future Social Security earnings.
- Bridge benefit for older workers: The second group which has support to increase their benefits is for older workers with a history of physically demanding work. Physically demanding careers often mean that you are forced into retirement well before the full retirement age of 70. This means that when you claim your benefits, they are less as you did not wait until 70. To amend this, it has been suggested that a bridge benefit be introduced to ensure that these individuals do not lose out on the amount of money they receive.
Survey takers suggest ways to fund the proposals
Amidst concerns over the fund’s longevity, respondents of the survey have suggested ways in which to fund their proposed suggestions. 82% of respondents supported the idea that the payroll cap on tax contributions for earnings above $400,000 should be removed, to then increase the payroll tax rate from 6.2 percent to 7.2 percent for both employers and employees. This would maintain the longevity of the fund while also allowing for the inclusion of the increase in benefits for caregivers and workers with physically demanding careers.
Speaking to Newsweek, Alex Beene, financial literacy instructor for the University of Tennessee said “Over the last year, we’ve seen a flurry of promises made by legislators on altering and enhancing Social Security benefits. The idea of extending benefits to those who need them for temporary childcare and who have physically demanding work that has made waiting to employment to receive funds a tremendous difficulty is certainly welcome news to those in these groups who would qualify.
