Cassandra Gentry, age 70, anticipates receiving a sizable cost-of-living rise in her Social Security benefits, not for herself but rather to pay for her two grandchildren’s haircuts and put food on the table. The three share an apartment building in Washington with 50 “grandfamilies,” or families where grandparents look after young children in the absence of their parents.
The increase in benefits, according to Gentry, who took in her grandsons to maintain them in a secure environment, will help her make ends meet. The communications retiree added, “I never considered paying into Social Security when I was working, but now that is what I depend on.” “To take care of these kids, I rely on my Social Security.”
What will Social Security grow by in 2023?
Analysts predict that the cost of living adjustment, or COLA, for Social Security in 2023 will be approximately 9% or perhaps higher, the highest in 40 years. The news will be released on Thursday morning. Not just the elderly will benefit. A little over 4 million kids receive benefits, and countless more will also receive assistance since they are being looked after by Social Security recipients, often their grandparents.
The effects will be profound, especially for low-income seniors like Gentry who support her growing 12-year-old granddaughter and 16-year-old grandson while also feeling the acute pinch of increasing food and energy bills. She laughed, “They eat everything. Because everything’s cost has increased, she claimed that the cash boost “is going to help us and it’s going to be a benefit.”
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The overall economy continues to be burdened by high inflation, which has prompted the Federal Reserve to boost interest rates to lower high prices. But in many ways, elder Americans are more negatively impacted by inflation than the general population. The burden includes a sizable portion of medical expenses.
The Social Security COLA will increase the amount of money available to the 70 million Americans who receive benefits, including a growing number of grandfamilies like the Gentry’s, when combined with a reduction in the Medicare Part B premium. The U.S. Census estimates that 2.4 million grandparents were in charge of their grandkids in 2020.
Since the government switched to a “kinship care” method of child welfare, which emphasises retaining children in the homes of their relatives rather than placing them in foster care, that number has grown dramatically. In turn, Social Security is the largest children’s support programme in the country even though it is typically thought of as a programme for older Americans.
Since the pandemic, Social Security has become even more crucial for children because “COVID has taken a lot of parents,” according to Maya Rockeymoore Cummings, CEO of Global Policy Solutions, a social change strategy company, and a nonresident senior fellow at Brookings Metro, a division of the Brookings Institution.
At least 140,000 American children under the age of 18 lost a parent or guardian as a result of COVID, according to a report from the National Institutes of Health from last October. Cummings claims that she thinks the real figure is far higher. We must realise that the COLA hike will benefit the entire household, not simply the elderly members of the family, she stated.
Gentry supports grandparents who care for their grandchildren, and the apartment complex where her family resides is full. Many of the African American grandparents, who help one another in their close-knit community, rely completely on Social Security, according to her.
According to a report by Global Policy Solutions, African American children are most in need of the extra assistance provided by Social Security payments. According to the U.S. Office of Personnel Management, grandparents raising grandkids are 60% more likely to live in poverty than grandparents who are not doing so.
According to a September Census report, the Child Tax Credit programme, which was increased during the pandemic, assisted tens of millions of children and their families and was a major factor in the 46% drop in child poverty since 2020. However, that initiative is now terminated, and there are already signs that child poverty is rising.
Benefits in many other government programmes are declining, but the COLA distinguishes Social Security, according to Nancy Altman, co-director of the advocacy group Social Security Works. Low-income kids benefit the most from Social Security benefits for children, she added, both directly and indirectly.