Is it okay if I’m late for Social Security testing?

Retirement


Release Date: May 15, 2023 at 2:50 PM ET

With Congress likely failing to raise the debt ceiling and Social Security benefits not being paid in a timely fashion, one obvious question is whether people will be receiving their checks in a few days. , Is it a week later or a few days later that matters? A few weeks late. Reading the evidence, it is very important.

First, millions of older people are almost entirely dependent on social security. The best figures come from studies by social security researchers using administrative tax and benefit data, showing:

With Congress likely failing to raise the debt ceiling and Social Security benefits not being paid in a timely fashion, one obvious question is whether people will be receiving their checks in a few days. , Is it a week later or a few days later that matters? A few weeks late. Reading the evidence, it is very important.

First, millions of older people are almost entirely dependent on social security. The best figures come from surveys by social security researchers using administrative tax and entitlement data, and in 2015, 21% of individuals received more than 75% of their family income from social security. (see Table 1).

read: What happens to Social Security payments if no agreement on the debt ceiling is reached?

As of 2015, there were 48 million people over the age of 65, so that number is 10 million. Since 2015, two changes have made this number even higher. First, as the population aged 65 and over increased from her 48 million to her 60 million, and the proportion of low-wage households with 401(k)s declined, Social Security became more of a source of retirement income. has become important. This means that the number of people who are effectively dependent on social security is about 13 million.

Will there be any problem if the testing of these 13 million people is delayed? They will definitely be paid in full in the end. The question is whether timing matters. These, he said, aside from the fact that 13 million people will have virtually no other sources of income by the end of this month, a series of studies suggest that timing is critical for cash-strapped low-income families. It has been. Several studies have looked at social security beneficiaries. The current schedule for depositing pension checks into bank accounts by the U.S. Social Security Administration is based on each retiree’s date of birth, with checks deposited on either the second, third, or fourth Wednesday of each month. is determined.

One study found that people who receive their Social Security checks early in the month are more likely to resort to payday loans and other means than those who receive their checks later in the month. People who get their check on the 4th Wednesday will use it to save their biggest expense, the rent, and make ends meet for the rest of the month. Decreased bad checks, overdrafts and payday loans. Timing matters when it comes to whether people have to resort to desperate measures.

Medical researchers who studied the distribution of Social Security checks among Medicare recipients pointed to another problem. They found that prescription fills increased by 6% to 12% among recipients who paid a small copay when Social Security checks were distributed. They found no such pattern among beneficiaries without copayments. This means that individuals are waiting for their Social Security check to be credited before receiving their medication. Delays in social security can therefore have a negative impact on cash-strapped retirees.

Other researchers investigated whether timing is important with respect to bill payments to people receiving food aid under the Federal Supplemental Nutrition Assistance Program (SNAP). SNAP provides 10% to 25% of household income up to 35% above federal poverty levels. The study was conducted in an unidentified New England state where the recipient’s SNAP debit card was topped up on the 1st of each month. When the card is topped up, it frees up money for other bills, such as utility bills, that are due at the same time. After tracking SNAP recipients for a year, the researchers found that utility bills were lower when the bill arrived at the same time as the SNAP card was deposited.

So for about 13 million people, the timing of Social Security testing is critical.



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