On Wednesday, October 1st, the U.S federal government was shutdown following a stalemate between the Republican and Democratic parties regarding the healthcare spending bill. Neither party was able to garner the required 60 votes to have their respective bill passed, with neither party willing to compromise. As a result, the federal government has since been shutdown, but what does this mean for Social Security beneficiaries?
Here is everything you need to know from benefit payments during a shutdown to the highly anticipated COLA announcement.
Are benefits still paid during a shutdown?
Federal agencies have two types of funding: discretionary spending, and mandatory spending. If a federal agency is funded through discretionary spending, their funding requires Congressional approval on an annual basis. Mandatory spending, on the other hand, means that the program or agency is funded automatically through existing legislature — and the Social Security program falls under the latter.
Since Social Security is funded through mandatory spending (i.e the dedicated payroll tax), benefits will still be paid to recipients as per the original schedule, and the SSA has shared confirmation of this on its blog as per an October 1st post.
“We want you to know that during the federal government shutdown, payments to all people who currently receive Social Security benefits and Supplemental Security Income (SSI) will continue with no change in payment dates. You will still receive your payments on time.” the SSA wrote.
The agency further shared that local offices, as well as hearing offices will remain open, however, services at the local offices will be offered at a limited capacity. According to the update, the following limited services will still be available at local offices during this shutdown:
- Apply for benefits
- Request an appeal
- Change your address or direct deposit information
- Report a death
- Verify or change your citizenship status
- Replace a lost or missing Social Security payment
- Obtain a critical payment
- Change a representative payee
- Make a change in your living arrangement or income (SSI recipients only)
- Obtain a new or replacement Social Security card
The Social Security and SSI benefit payments for October will also be paid out to recipients with no interruptions on the following dates, as per the schedule:
- October 1st — SSI benefit for October
- October 3rd — Social Security benefit for recipients who also receive the SSI benefit or those who received Social Security before May 1997
- October 8th — Social Security benefit for recipients with birth dates from the 1st to the 10th of their respective birth month
- October 15th — Social Security benefit for recipients with birth dates from the 11th to the 20th of their respective birth month
- October 22nd — Social Security benefit for recipients with birth dates from the 21st to the 31st of their respective birth month
- October 31st — SSI benefit for November
COLA announcement delay
Each year, benefit amounts are increased relative to year over year inflation, and this is known as the Cost of Living Adjustment, of COLA. The CPI-W for the third quarter of the current year is measured against the CPI-W of the third quarter of the previous year, with the increase becoming the next COLA. The CPI-W data is released on a monthly basis by the Bureau of Labor Statistics (BLS), however, due to the shutdown, majority of the staff at the BLS have been furloughed and operations have been halted.
Since the shutdown only began in October, the September data will have already been collected by the BLS, however, it will only be processed and released once the shutdown ends. The BLS was previously scheduled to release the September data on the morning of October 15th, with the SSA making the COLA later that same day. It is not currently known when this shutdown will end, and as such, there is no confirmed date for the COLA announcement at this time. However, based on the July and August data, seniors can expect a COLA raise of at least 2.7%, which will translate to a $54 increase relative to the average benefit check.