As the government shutdown continues, many are concerned about whether their Social Security benefits will still be paid, the simple answer is yes. Even during a shutdown, Social Security checks still go out. This is simply because the program is funded separately through payroll taxes and trust funds, not through Congress’s yearly budget fights.
However, even though checks are safe, there is another looming problem. The shutdown is putting the annual cost-of-living adjustment, known as COLA, on shaky ground. If COLA gets delayed, millions of seniors won’t know how much their benefits will increase next year. There are many families who live on fixed incomes and this announcement is important for them.
Social Security Payments Keep Flowing
Whether you’re already retired, disabled, or receiving survivor benefits, your monthly payment will not stop because of a shutdown.
Knowing this, brings relief to approximately 70 million Americans who rely on the program as their primary source of income.
The Problem: COLA Is Stuck in Limbo
Every year, in the month of October, the Social Security Administration (SSA) announces the COLA for the next year. The COLA is meant to help retirees keep up with the rising costs of the economy.
The adjustment is based on government data, especially inflation numbers from the Bureau of Labor Statistics. The problem is that if the shutdown impacts the release of inflation data, the SSA won’t be able to announce the COLA on time.
This will leave millions of retirees unsure of what their January checks will be.
Why COLA Matters So Much
Since many families live on fixed incomes, even a small COLA adjustment will make a difference as every cent counts.
Retirees are unable to make plans if they do not know whether that raise will occur. Should they wait and see or restrict their budgets now? Should they save for the holidays or can they afford to spend them? That unpredictability is quite stressful for those on fixed incomes.
Shutdown Side Effects
The COLA delay isn’t the only headache retirees could face during a shutdown. Even though checks keep coming, other parts of Social Security can slow down, such as:
- Beneficiaries are experiencing longer wait times on the phone when calling local field offices.
- Delays in new applications for retirement, disability, or survivor benefits.
- Reduction in staff lead to backlogs and delays in processing claims.
Why This Problem Feels “Unexpected”
Many people are relieved to know that their Social Security benefits will still be paid as normal. However, it’s important to remember that Social Security is program that depends on accurate data and efficient administration.
When that procedure is disrupted by the shutdown, retirees experience uncertainties they weren’t prepared for. In order to plan their life, they want to know how much their checks will be next year, not simply when they arrive.
The Bottom Line
Even though Social Security benefits are still paid on time, the shutdown has caused other issues for Social Security. The COLA announcement could be delayed, and this will leave millions of people in the dark about their Social Security checks for next year.
There are many families who rely on Social Security checks to provide for their families and it’s important for them to know how much their benefits will be so they can plan ahead. It can be noted that the shutdown indeed causes unnecessary stress for beneficiaries, especially those who depend Social Security benefits.
With that being said, it is important for beneficiaries to follow updates relating to the shutdown so that they are aware of what’s happening with their benefits. The best option is to plan ahead and try to look at other savings options to ensure financial stability.