THE CONSUMER PRICE INDEX ERROR
Questions and Answers
heard that SSA will send an extra check in July. Is that true?
SSA will be sending payments, checks and direct deposit, to most
Social Security beneficiaries and Supplemental Security Income (SSI)
recipients in July. SSA will also be sending a written explanation
to each person receiving a payment. You do not need to contact SSA.
is SSA sending the extra payment?
year, the Bureau of Labor Statistics discovered an error in the
way the Consumer Price Index was calculated for 1999. That error
meant that the Social Security cost-of-living-adjustment at the
beginning of 2000 was 1/10 of 1 percent lower than it would have
been had the error not occurred (2.4 percent rather than 2.5 percent).
The extra payment compensates those Social Security beneficiaries
who were affected by the error for any shortfall they experienced
between January 2000 and July 2001, when the payments will be made.
was affected by the mistake?
mistake affected people who were eligible for Social Security before
January 2000. People who became eligible for Social Security January
2000 or later were not affected. Individual SSI recipients who were
eligible for SSI anytime between January 2000 and July 2001 were
also affected. However, those who received SSI as a member of a
couple, were not affected.
everyone have a shortfall in benefits?
Social Security beneficiaries and SSI recipients had a shortfall
as a result of the CPI error. However, because SSA is required by
law to round benefits to the next lower whole dollar and to use
other rounding rules in calculating benefits, some individuals received
the same amount as they would have received if the error had not
occurred. For the same reason, SSI couples also did not have any
shortfall, although individual SSI recipients did.
how much were benefits lower?
Social Security beneficiaries received $1 less per month than if
the error had not occurred. A few individuals with higher Social
Security benefits received $2 or $3 per month less. A very few individuals
received $4 per month less. Most individual SSI recipients received
$1 less per month. SSI couples did not have a shortfall because
of the way their benefits are calculated.
heard that SSA was sending extra payments. I didn't get one. Why
everyone who is receiving Social Security benefits today had a shortfall
as a result of the error. There are several reasons why that may
be the case. Some of those reasons are: you could be receiving retirement
benefits, but turned 62 after January 2000; or you may have first
begun receiving benefits in 2001 and, because of the rounding rules
the Social Security Administration uses to compute benefits, the
error didn't affect you; you may have become disabled after January
2000; or you may be a member of an SSI couple.
the problem fixed?
will be. SSA will send out payments to those individuals who were
affected to compensate them for any shortfall experienced between
January 2000 and July 2001. Beginning in August 2001, SSA will adjust
monthly benefits so that individuals will not experience any future
shortfalls in their payments.
much will I get?
most common amount will be $19, $1 for each of the 19 months from
January 2000 to July 2001. The amount that any given individual
will actually receive depends on when he or she began to receive
benefits, the level of the Social Security benefit, and whether
he or she receives just Social Security, just SSI or both. Social
Security will send affected beneficiaries information explaining
any changes to benefits.
Security: Everyone who was eligible for Social Security before January
2000 and who received benefits during 2000 will receive $1, $2,
$3, or $4 (depending on their monthly benefit level) for each of
the 12 months in 2000, or $12, $24, $36, or $48. Most affected individuals
will receive $12 for 2000.
addition, affected individuals who received benefits in 2001 will
have their benefits recalculated and receive an amount for 2001
equal to the difference between their "old" 2001 benefit
amount and their "new" 2001 benefit amount for each of
the seven months between January 2001 and July 2001. For instance,
if their new benefit is $1 higher, they will receive $7 for 2001.
If their new benefit is the same, then they will not receive anything
for 2001, because they did not have a shortfall in 2001.
in August 2001, benefits will be fully adjusted and individuals
will not have any future shortfalls.
SSA will determine what SSI benefits would have been for each month
between January 2000 and July 2001 and pay any shortfall to the
affected SSI recipients. Beginning August 2001, SSI benefits will
be adjusted so that no shortfall will occur in the future.
Social Security and SSI: For those who receive both Social Security
and SSI, the Social Security payment for the shortfall in their
Social Security benefits for the period from January 2000 to July
2001 will not count as income for SSI. However, their future SSI
checks may be reduced if their Social Security payment increases.
relative died recently. Will SSA send a payment for him/her?
will compute the shortfall for everyone who was affected, even those
that have died since January 2000. SSA will automatically send the
payment to a survivor if SSA has already established that the survivor
is entitled to payments, such as the lump-sum death benefit. If
you believe you are entitled to a payment on behalf of a deceased
relative who became eligible for benefits before January 2000, but
do not receive one automatically, contact SSA at 1-800-772-1213.
receive Special Veterans Benefits from SSA. Will I get a payment?
recipients of Special Veterans Benefits (SVB) had shortfalls and
will receive payments. The information above for SSI applies to
SVB, except that where the shortfall in the monthly payment standard
for SSI was $1, the shortfall for the SVB monthly payment standard
was 75 cents. SVB is a program that began in May 2000 to pay benefits
to certain World War II veterans who reside outside the United States.
SVB shortfall payments will cover the period from May 2000 to July
much will all of this cost SSA?
total, SSA will send about $1.1 billion in payments to approximately
50 million Social Security and SSI recipients. The administrative
costs to SSA will be about $57 million.
these payments worsen Social Security's long-term financing?
These payments, although they are a large amount of money in the
short-term, will have a negligible effect on Social Security's long-range
a spetonw4-60-u065-70340w-6,yn-e50o9 4-079bw-09\3-98,w\-0t\w-40,j-n08opui-0e95h,
SSA Press Office 449
Altmeyer Bldg. 6401 Security Blvd. Baltimore, MD 21235
410-965-8904 FAX 410-966-9973