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New Social Security Bill: How Updates Could Lead to ‘Seismic Achievements’ for COLA and More

·2 min read
J Scott Applewhite / AP
J Scott Applewhite / AP

This week, House Representative John B. Larson, chairman of the House Ways and Means subcommittee on Social Security and major advocate of the enhanced Child Tax Credit, presented a revised Social Security reform bill.

See: Fight for Extended Child Tax Credit Intensifies As Democrats Slam Biden’s One-Year Proposal
Find: 6 Ways To Start Building Generational Wealth for Your Family

The new version of the bill, much like the CTC, aims to “offset the concentration of wealth,” House Ways and Means Committee Chair Richard Neal said. “We have this rare moment to accomplish seismic achievements, and this is the time to do it.”

The revised bill, known as Social Security Act 2100: A Sacred Trust, contains changes aimed at attracting the support of President Joe Biden, as well as Republicans in Congress. Minimum benefits will be set at 125% above the poverty line.

Stimulus Update: Reasons Your October Child Tax Credit Payment Hasn’t Hit Yet

In addition, the bill seeks to:

  • Set a higher minimum benefit for low-income workers

  • Offer a benefit boost of roughly 2% for new and existing beneficiaries

  • Include a cost-of-living adjustment tied to the Consumer Price Index for the Elderly (CPI-E)

  • Extend benefits for students up through age 25

  • Increase certain widow and widower benefits

  • Boost benefits after 15 years

  • Eliminate the five-month waiting period for disability benefits

  • Create caregiver credits for people who take time out of the workforce to care for family members so their benefits are not reduced

Additionally, the bill seeks to eliminate a higher payroll tax rate to fund the Social Security increases. Instead, caps for Social Security taxes paid by high-wage earners would rise. In 2021, Social Security taxes are capped at $142,800 in wages. In 2022, that limit rises to $147,000. Plus, taxes on wages will be reapplied on wages of $400,000 and up, in line with Biden’s intentions to raise taxes on high wage earners.

Learn: More Americans Prioritizing Workplace Benefits — How COVID Highlighted ‘Convergence of Health and Wealth’
Explore: Study Suggests Paid Paternity Leave Would Reduce Inequality Among Income Classes

The bill also proposes to raise the thresholds above which income, including Social Security, is taxed, CNBC reported. Currently, those amounts sit at $25,000 for individuals and $32,000 for couples. The bill calls for increases to $35,000 and $50,000, respectively.

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Last updated: October 27, 2021

This article originally appeared on GOBankingRates.com: New Social Security Bill: How Updates Could Lead to ‘Seismic Achievements’ for COLA and More