For a number of Social Security beneficiaries, the monthly benefit check can mean the difference between making ends meet and coming up short each month. This year has been one of uncertainty in terms of the Social Security program as the Trump Administration stepped into office and began enacting cutbacks through its Department of Government Efficiency (DOGE).
The annual report from the Social Security Board of Trustees may have also compounded these concerns as it outlined the manner in which the funding issues faced by the program are accelerating. If no sustainable change is enacted to the program soon, beneficiaries will likely be hit with cuts to their benefits of up to 23% and perhaps even more.
The U.S. federal government is also currently entering week three of its shutdown following a deadlock between the Democratic and Republican parties regarding the healthcare spending bill. The impact of this was not too severe in terms of Social Security, with benefits still being rolled out as per schedule. Social Security field offices are also still open to the public, however, only a limited number of services will be available to customers for the duration of the shutdown.
As such, here is what you need to know about the impact of some of the recent changes in the Social Security program.
Impact of the government shutdown on Social Security
The U.S. federal government has been shutdown since October 1st as a result of a deadlock between the Republican and Democratic parties regarding the healthcare spending bill. Neither party is willing to give in to the other and as such, no end is yet in sight to this lockdown. In terms of Social Security, beneficiaries will continue to receive their benefits as scheduled with no cuts or delays. This is because Social Security is funded through mandatory spending and does not require annual Congressional approval.
Aside from this, the other major change implemented by the White House this year would be the additional tax relief under the One Big Beautiful Bill Act. Under the new legislation, seniors aged 65 and older will qualify for an additional $6,000 tax break for single filers ($12,000 for married joint filers), provided that their income is under the $75,000 threshold for single filers and $150,000 for joint filers. Through this additional tax break which will be in effect for a temporary period ending in 2028, approximately 90% of seniors will now become exempt from paying taxes on their benefits.
Should retirees be worried for the future of Social Security?
Speaking to Sean Hannity of Fox News earlier this year in February, President Donald Trump said the following: “Look, Social Security won’t be touched, other than if there’s fraud or something. It’s going to be strengthened. But it won’t be touched.”
On a surface level, this statement would initially come across as reassuring, however, there is far more to it. Due to the projected shortfall of a major trust fund used to pay Social Security benefits, beneficiaries may soon be faced with benefit cuts of up to 23% as soon as 2033. As such, leaving Social Security untouched, is not the wisest course of action since that will all but guarantee the shortfall and its consequent benefit cuts.
Furthermore, the estimated 23% cut to benefits was determined prior to the passing of the One Big Beautiful Bill Act and its senior tax break. “The extension of tax cuts and the increased deductions for seniors in the One, Big, Beautiful Bill will have material effects on the financial status of the Social Security trust funds,” according to Social Security Administration Chief Actuary Karen Glenn.
At the moment, seniors do not have to feel too concerned as lawmakers are currently debating the best plan of action to prevent this shortfall, however, nothing has been concretely decided as yet.