(NEXSTAR) – The Senior Citizen’s League, a nonpartisan organization focused on educating older Americans about legal, financial, and rights-based issues impacting their demographic, has suggested that the Social Security Administration consider implementing a “one-time catchup payment” to assist retirees in managing costs amid increasing inflation.
The “catchup payment,” also known as a “make-up payment” by The Senior Citizens League (TSCL), would ideally be given to Social Security beneficiaries in addition to next year’s cost-of-living adjustments (COLA), according to the group’s aspirations.
“Many retirees have faced a significant reduction in their purchasing power, as Cost-of-Living Adjustments (COLAs) have not kept up with the swiftly rising costs of essentials like food, housing, and healthcare,” states a TSCL statement shared with Nexstar.
Which rising costs are seniors facing?
In a press release from last month, TSCL estimated next year’s COLA to be 2.6% — just 0.1% more than this year’s increase. However, despite these increases being intended to match inflation and help Social Security beneficiaries sustain their spending power, TSCL has long contended that the metrics employed for calculating the annual increases (i.e., the Bureau of Labor’s Consumer Price Index for Urban Wage Earners, which itself gauges changes in prices for typical consumer goods and services) fail to reflect the expenses elderly Americans face for items like medicine, housing, and groceries.
A recent TSCL survey of nearly 2,000 Social Security beneficiaries revealed that one-fifth of respondents were spending over $1,000 exclusively on healthcare costs. Additionally, an overwhelming majority (96%) believed the Social Security Administration should derive their COLA calculations from a different dataset, such as the Consumer Price Index for the Elderly, which concentrates on costs impacting Americans aged 62 and above.
“The recent inflation surge resulted in many older Americans losing Social Security buying power, and increased Medicare Part B premiums frequently negated their full COLA increase,” TSCL executive director Shannon Benton explained to Nexstar. “A catch-up payment would aid in recovering that lost value and provide urgently needed assistance for retirees reliant on fixed incomes.”
Earlier this year, the Bureau of Labor Statistics also stopped collecting data for its indexes in three cities and reduced collection efforts in about 15% of 72 other metro areas, sparking concerns that the more limited data might be less reflective of the prices seniors are paying. (BLS, however, claimed in July that its new practices did not result in any significant changes when compared to previous methods.)
“If the government fails to act and the CPI’s data quality begins to erode, it increases the likelihood of the government providing a COLA that doesn’t match inflation,” TSCL wrote at the time.
How would a ‘catchup payment’ help?
TSCL didn’t go into much detail about the specifics of its proposed “catchup payment” in last month’s press release. But in an email shared with Nexstar, TSCL suggested the money could be provided to eligible recipients in the same way that that 2009’s $250 Economic Recovery Payments were doled out to Social Security and SSI recipients amid the Great Recession. (A third of recipients ultimately used the money to pay off debt, the BLS later reported.)
Benton also pointed to the Economic Impact Payments, which provided to eligible U.S. citizens during the coronavirus pandemic, as evidence that special financial assistance can, and has, been disbursed by the federal government amid times of economic uncertainty.
How much does TSCL envision the payment to be?
$1,400, Benton told Nexstar. And while TSCL advocates specifically for seniors, Benton said the organization would be “thrilled if everyone on Social Security could receive a special boost.”
A representative for the Social Security Administration did not return a request for comment on the proposal.
Make-up payments aside, the majority of seniors surveyed for TSCL’s recent report still believe there are fundamental problems with how the Social Security Administration attempts to mitigate the effects of inflation when it comes to yearly benefit increases.
“If four in five seniors think inflation was higher than the government reported in 2024, maybe we should stop questioning their experiences and start questioning why the COLA is failing to measure them,” Benton said at the time.
