Coronavirus – How it May Affect Social Security Recipients and Benefits

The Coronavirus and Social Security Benefits. Who’s affected?

The coronavirus has made its presence known through its growing impact on the global economy as well as its reoccurring mention on all major news sources. Though you’ve most likely heard all the basics on this spreading disease, have you considered how it may affect Social Security benefits now as well as the next COLA update?  Its possible effect relies not only on how the disease itself spreads, but also how its economic effect continues to grow.

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Social Security Offices

As of March 17, 2020, all local Social Security offices are closing their doors to the public and focusing on workloads considered critical. The cases considered critical are:

    • those in dire need of benefit payments, including if you didn’t receive your benefit payment, presumptive payments, or if you need benefits reinstated
    • Severe disability, blindness, terminal illness cases
    • Dire need Supplemental Security Income and 1619B eligibility decisions required for urgent Medicaid approval

If you already had a scheduled appointment, you will be contacted by phone and/or rescheduled for a phone appointment. The Social Security website notes that the telephone appointments will still give priority to cases considered dire or critical.

If you are trying to obtain a new or replacement Social Security card or use benefit verification services, you may have to wait for offices to reopen. However, if you have access to the internet you may be able to use their online services. To get a benefit verification, use your Social Security account at www.socialsecurity.gov/myaccount. In most states, you can also request a new Social Security card using your account. For further online services provided by the Social Security Administration, visit www.ssa.gov/onlineservices.

Possible New Paid Leave and Benefits

            According to the Families First Coronavirus Act Title-By-Title Summary, “the legislation provides paid leave, establishes free testing, protects health care workers, and provides important benefits to children and families.” One of the most notable pieces of this bill is the potential to change paid sick leave in America. Administered by the Social Security Administration, emergency paid leave benefits will be available to those needing to take an “emergency leave day” due to one of the defined COVID-19 related reasons defined in the Title-By-Title Summary, stated below.

    • The worker has a current diagnosis of COVID-19
    • The worker is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official to prevent the spread of COVID-19
    • The worker is caring for another person who has COVID-19 or who is under a quarantine related to COVID-19
    • The worker is caring for a child or other individual who is unable to care for themselves due to the COVID-19-related closing of their school, childcare facility, or other care program

It is still uncertain how this bill will be handled in the long-term. If this is passed, wage workers who are infected could be paid 2/3 of their wages while unable to work. It has also been proposed to require a permanent policy allowing wage workers to accrue at least 7 days of paid sick leave, though they would have to be employed for 60 days before receiving this government supported benefit.  This employment requirement could be dismissed in the case of a pandemic, like the current COVID-19 outbreak. These policies have been written with focus on the current pandemic, and the longevity of these benefits has not been settled. A possible discussed compromise between parties is that these benefits will seize when the threat of COVID-19 ends. While these adjustments may be seen short-term, the long-term effects of COVID-19 are already being considered as well.

2021 Cost of Living Adjustment

Each October, the Social Security Administration announces the coming year’s Cost of Living Adjustment (COLA). This measure adjusts the income Social Security beneficiaries receive to account for estimated inflation and changes in cost of living, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  The percentage increase is determined by taking the average CPI-W for the third calendar quarter of the most recent year a COLA was determined and comparing it to the average CPI-W for the third calendar quarter of the current year. If there is a positive increase of at least 0.05%, beneficiaries will receive said increase starting December of the current year. The CPI-W is determined by the following major spending categories: food & beverage, housing, apparel, transportation, medical care, recreation, education & communication, and other goods & services (i.e. tobacco products, haircuts and other personal needs). Though this method of calculation has been in place for decades, it isn’t perfect. According to the SSA, over 70% of beneficiaries are retired workers and their dependents. The spending habits of the Urban Wage Earners and Clerical Workers group do not directly match the spending habits of seniors. For example, the latter group is most likely allocating more of their spending to medical care. When estimating the future COLA, it is important to remember it is not a perfect calculation.

Coronavirus is the encompassing name of a family of viruses that can result in illnesses as minor as a common cold to more serious diseases such as Middle East Respiratory Syndrome or Severe Acute Respiratory Syndrome says the World Health Organization (WHO). The new novel strain of this virus, now officially named COVID-19 by the WHO, had not been identified in humans until the very end of 2019. As people prepare for how the 2019 Novel Coronavirus may spread in the U.S., demand for food and other household goods has risen. Conversely, as more severely affected countries have experienced changes in industry production, crude oil prices have deflated. You may have seen this firsthand if you pumped gas recently and noticed the lower than normal prices. The competing expected inflation of food & household goods and deflation of oil prices are two indicators of the upcoming COLA. In heavily affected China, their Consumer-Price-Index (CPI) jumped from a steady 1%-3% to a 5.4% in January of 2020. The increased demand for goods in the U.S. matched with the inflation in a country heavily involved in global supply chains is likely to affect our CPI as well. It is still unclear whether the inflation or deflation will outweigh the other.

Though the 2021 COLA announcement is still months away, looking at economic trends now can give insight into how beneficiaries will be affected in the coming year. Regardless of how coronavirus spreads, the adjustment in beneficiaries’ income will be made to ensure SSI and SSDI recipients are not barred from their needs by economy inflation.

Source: https://www.ssa.gov/cola/

If you have any questions regarding the coronavirus and how it may affect your social security benefits in Minnesota, Ohio, Wisconsin or Missouri, feel free to reach out to one of our social security disability attorneys at Hoglund Law.