Hirono, Blumenthal Introduce Social Security COVID Correction and Equity Act
Bill includes fix to Social Security formula to prevent substantial benefits cuts for retirees due to pandemic
WASHINGTON, D.C. – Senators Mazie K. Hirono (D-Hawaii) and Richard Blumenthal (D-Conn.) introduced S. 4986, the Social Security COVID Correction and Equity Act, which provides temporary emergency relief for Social Security beneficiaries, and makes a technical correction to the formula used for determining benefits to prevent substantial cuts for individuals turning 60 this year. Specifically, the bill ensures that these individuals are not penalized due to the economic downturn caused by the coronavirus pandemic, and that their benefits are not calculated based on lower average wages from 2020. Companion legislation was introduced in the U.S. House by Congressman John B. Larson (D-Conn.), Chairman of the House Ways and Means Social Security Subcommittee.
Social Security benefits are calculated based on a person’s lifetime earnings, which are indexed to account for increases in wages over time. Because of the significant economic downturn caused by the coronavirus pandemic that will result in lower average wages in 2020, individuals who turn 60 this year could see their Social Security benefits permanently reduced by an average of $960 per year or more. This change could impact many of the 17,800 Hawaii residents who turn 60 this year, and millions of Americans nationwide.
Separately, the bill also includes temporary emergency relief for individuals who rely on Social Security by increasing benefits across the board, increasing the special minimum benefit for lower income beneficiaries, reducing taxation on benefits for lower and middle income beneficiaries, providing support for grandparents with dependent children, providing support for dependent children who are students, and expanding benefits for widow(er)s, among other things.
“The pandemic’s fallout has had devastating economic consequences for communities across the country this year, but Hawaii workers shouldn’t also be disadvantaged in the long-run. They and millions of Americans who turn 60 this year are facing tough economic choices. The Social Security COVID Correction and Equity Act makes sure that beneficiaries—through no fault of their own—don’t pay the price for an unexpected economic crisis,” Senator Hirono said.
“Americans of all ages are struggling during this pandemic, but unless Congress takes action, Social Security beneficiaries who turn 60 this year will be particularly hard hit. Because Social Security benefits are directly tied to average yearly income, Americans who celebrate their 60th birthday this year could see a significant decrease in benefits over their lifetime. The Social Security COVID Correction and Equity Act would make sure that beneficiaries aren’t unfairly penalized for the economic downturn, and don’t further suffer or lose out on hard-earned benefits,” Senator Blumenthal said.
“No one could have predicted the COVID-19 pandemic, especially not in 1977 when the Social Security benefit formula was created. Through no fault of their own, around 4 million Americans will lose out on the Social Security benefits they’ve earned, because of an unexpected drop in the Average Wage Index used to calculate benefits. For a median earner born in 1960, this could mean a reduction of nearly $1,000 a year for the rest of their life,” said Chairman John B. Larson. “As Chairman of the House Ways and Means Social Security Subcommittee, I have introduced legislation to prevent this. I thank Senator Hirono for her work on this issue in the Senate and look forward to working with her.”
“Senator Hirono’s legislation ensures that the earned benefits of individuals born in 1960 and 1961 will not be cut by the ‘COVID notch’ and it makes this fix without cutting benefits for any other beneficiaries. And the temporary benefit improvements in her bill will give seniors the peace of mind to get through this crisis that has hit them harder than anyone. We look forward to helping Senator Hirono enact this needed legislation,” Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare said.
Senator Hirono has championed efforts to make Social Security benefits more accessible and fair. In 2013, Senator Hirono worked with the Social Security Administration (SSA), Hawaii County, and Hawaiian Telecom to provide video teleconferencing services at WHCC for West Hawaii residents. Since 2015, Senator Hirono has introduced the Protecting and Preserving Social Security Act (PPSSA), which would strengthen the Social Security program by restoring fairness in contributions, and increase Social Security benefits for seniors and other beneficiaries who rely on the program. Recently, SSA indicated that PPSSA would extend the solvency of the combined Social Security Trust Fund by an additional 19 years—through 2053. Earlier this year, Senator Hirono also a led a letter with 37 colleagues demanding that President Trump retract comments about cutting earned benefits like Social Security and Medicare.
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