The SSA provides retirement and disability benefits to millions of Americans, the latter involves a chart review. COVID-19 could impact these benefits.

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Can COVID19 Change your
Social Security?
The SSA provides retirement and disability benefits to millions of Americans,
the latter involves a chart review. COVID-19 could impact these benefits.
The United States Social Security program, whether retirement or disability
program, is a great support for millions of retirees and disabled Americans. Since
the disability benefits are granted based on a detailed medical chart review, the
financial assistance goes only to people who are really eligible for the same. Any
kind of hindrance in the distribution of these benefits could be distressing for
beneficiaries. Now that the coronavirus situation is worsening in the United
Statesas well as across the world, serious concerns have been raised regarding its

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possible impact on social security. While the SSA (Social Security Administration)
assures that beneficiaries will continue receiving their monthly checks
uninterruptedly, there are certain ways in which the COVID-19 mitigation efforts
undertaken nationwide could impact the social security program.
• Reduced COLA: Since there is the possibility of an impending recession, it is
estimated that the growth in future social security payments could decline
with increase in inflation. As a result, the annual raise in COLA (Cost of
Living Adjustment) could reduce or even disappear totally in 2021. The
COLA raise is given to keep benefits on par with the rising price of goods and
services. COLA is determined by comparing the average 3rd quarter reading
(July – September) of the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) in the present year to the average 3rd quarter
reading of the CPI-W in the previous year. With increase in the CPI-W
reading from one year to the next, beneficiaries receive a positive COLA
that corresponds to the percentage increase and rounded to the nearest 10th
of a percent. If the CPI-W reading falls from one year to the next, no COLA
is passed along, and as a result, the benefits stay as such in the upcoming
year, without any increase. Many spending categories are considered with
regard to the CPI-W. The United States has seen a reasonably healthy
increase in inflation with regard to medical care, shelter, and food costs in
recent months; however, energy prices have considerably fallen as crude oil
demand has reduced. These lower energy prices along with the fear of a
recession could lead to a low or even non-existent COLA in 2021.
• Lower payroll tax collection: Payroll tax, which is a 12.4% tax on earned
income, includes wages and salaries but not investment income. This tax is
applied to all income earned between $0.01 and $137,700, with earnings
above $137, 700 exempt. In the present scenario, employees are working
remotely and there are large-scale shutdowns. Consequently, employees
may be earning less income this year, especially if there is no paid-leave
policy passed by the federal government. When the income earned is less,
payroll tax revenue will also be less. Since payroll tax is social security’s
mainstay, any significant reduction to payroll tax revenue would mean a
weakened social security program.

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• Increased cash outflow in 2021: The Social Security Board of Trustees has
estimated that 2020 will be the first time since 1982 that the program will
spend more than it collects. This expenditure was estimated to be around
$4 billion in 2020, which is negligible when compared to Social Security’s
asset reserves of $2.9 trillion. However, if working Americans earn less as a
result of the COVID-19 impact, you may witness a much larger outflow of
revenue this year.
• Possibility of higher taxes: The Congress is suspending required minimum
distributions on retirement accounts such as a traditional IRA or a 401(k) for
2020. This will allow retired Americans to avoid selling assets at a low price
and give them time to increase again. However, in case retirees choose to
tap a retirement account due to increased expenses, their social security
benefits could be taxed at a higher amount. Individuals earning $25,000 to
$34,000, and a married couple filing jointly and earning $32,000 to $44,000,
could be taxed on up to 50% of their social security benefits. If you tap a
retirement account too much, the taxable amount of your social security
will increase – up to 85% of your benefits could be taxed if your income is
more than$34,000 (for individuals) or $44,000 (for couples).
• Limited support from SSA employees: Just as other organizations, the SSA
has requested its employees to work from home if they are able to so that
possible COVID-19 infection can be minimized. Therefore, beneficiaries and
applicants will experience limited interaction only with SSA employees until
the virus threat is gone. However, current and future beneficiaries can
utilize services via the SSA’s online portal. You can create your “my Social
Security” account and apply for retirement benefits, spousal benefits,
disability income benefits, change address, and check on the status of an
appeal or application.Besides, you may also be able to communicate with an
SSA employee over phone.
Social security retirement and disability benefits applicants, social security
attorneys and providers of medical records services for these attorneys, are all
concerned about the long-term effects the coronavirus pandemic could have on
the social security program. Undoubtedly, this is an occasion that calls for the
highest degree of caution available, with the entire world fighting against an

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unknown and vicious enemy. It is important that retirees and disabled people who
are receiving Social Security benefits review how their financial situations could
change and how they can effectively manage the changed situations.