The level of disability benefits that you receive depends at least somewhat on inflation. Inflation occurs whenever the prices of things increase over a period of time, so your benefits end up being able to buy you less and less. The Social Security Administration (“SSA”) looks at the Consumer Price Index (“CPI”) to see how much certain items like food and cars have increased in price. If the increase is enough, your benefits will increase as well to make up for the change.
One proposed change to Social Security may impact this calculation, however. The bipartisan “Gang of Six” is a group of three Democrats and three Republicans in Congress who proposed a solution to the country’s debt crisis. Oklahoma Senator Tom Coburn is part of the group. The Gang of Six wants to change from using the CPI as a gauge of inflation to another method called the chained consumer price index.
The chained index would likely mean fewer benefits for disability beneficiaries. Leave your comments below on how you manage to stretch your benefits further during tough times. The chained index figures that if the price of one thing (say, chicken) goes higher, consumers will switch to something else, perhaps beef. This way people save money, and the higher prices do not really affect them, the argument goes. Do people really act this way though when one food product rises? Are most things we buy easy to replace with something cheaper?
Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys