By Eric Morath
Social Security recipients are expected to receive next year the largest increase in monthly benefit payments since 2012.
Based on Labor Department data released Tuesday morning, the Social Security Administration is expected to announce a roughly 2.0% increase for monthly checks. It is the largest cost-of-living adjustment since a 3.6% increase in 2012.
Social Security trustees had projected this summer a 2.2% increase in benefits for the coming year.
About 66.7 million people -- roughly 1 in 5 Americans -- will receive a boost to their income next year due to the adjustment. Social Security benefits adjust each year, with the goal of keeping payments in line with changes in consumer prices.
In 2017, recipients received a 0.3% increase after receiving no cost-of-living adjustment in 2016. That reflected very low inflation in 2015 and 2016 due to plummeting gasoline prices.
Next year's larger increase could be welcome news to seniors, those receiving disability payments and other beneficiaries. There has been no annual increase three times since the recession ended in 2009. That had never previously occurred since Congress approved automatic annual adjustments in the mid-1970s. Annual increases averaged 4.3% in the 1980s and 1990s.
But a larger increase next year could be at least partially offset by increased Medicare premiums. The cost-of-living figure plays a major part in determining premiums for Medicare Part B, which covers doctor visits and other types of outpatient care for elderly and disabled Americans.
While the final figure on the premium increase won't be announced immediately -- the Centers for Medicare and Medicaid Services last year released it in November -- the bump is likely to result in higher premiums for a majority of Medicare beneficiaries.
The cost-of-living adjustment matches up with the recent trend in consumer prices. An uptick in energy prices, and other costs in the economy, propelled consumer prices modestly higher since mid-2016. Hurricanes striking the southern U.S. in recent months pushed gasoline prices more.
But inflation is still low by historical standards.
Little or no cost-of-living increases in recent years drew criticism from AARP, the powerful lobbying group for older Americans. It said many seniors face rising medical and housing costs and may not benefit from lower gas prices to the same degree as commuting workers.
The Social Security Administration determines annual cost-of-living adjustments from a Labor Department inflation gauge, the consumer-price index for urban wage earners and clerical workers, or CPI-W. That is a slightly different measure than the more broadly reported index that covers all urban consumers.
The calculation is based on the average monthly price-index level from the July-through-September period.
Write to Eric Morath at email@example.com
(END) Dow Jones Newswires
October 13, 2017 09:16 ET (13:16 GMT)
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