With an overall government shutdown looming, most people receiving status from the Social Security Administration are wondering if there would be an impact caused by such an action upon their payments. This article discusses how such a potential shutdown may impact Social Security payments for January 2025, given the soon-to-be implemented COLA.
Understanding government shutdowns
It technically occurs when Congress fails to pass a budget or continuing resolution, whereby the non-essential government services will be put on hold as detailed here, What’s in the resolution to avoid a government shutdown? This is the new temporary spending bill that will last for three months. With government funding about to run out on December 20, 2024, Social Security beneficiaries may need to know if they would still receive payments come January. The necessary ones, however, would include those from the Social Security Administration, among others, though federal employees could still be on furtive which might delay the services or possibly even stop some.
Impact on Social Security payments
Although the shutdown can affect many other aspects of life, Social Security payments are less likely to be disrupted. Social Security benefits are considered “mandatory spending” and are paid out of dedicated trust funds rather than annual appropriations. That structure allows benefits to continue being paid when all other government functions may come to a halt.
- Scheduled payments: Beneficiaries will receive their Social Security payments in January 2025 as they always have. Those born between the 1st and the 10th will have their checks distributed on January 8; those that were born between the 11th and the 20th get their cash on January 15 and beneficiaries who are born between the 21st and 31st will see their checks on January 22. Beneficiaries that began drawing their benefits prior to May of 1997 also are covered for January.
The COLA adjustment for 2025
In addition to the delayed payments risk associated with a shutdown, beneficiaries should be aware that the COLA for 2025 will be 2.5% for Social Security and SSI benefits. This reflects changes in inflation rates and is intended to help beneficiaries maintain their purchasing power.
Benefit Increases: Starting in January, the average retirement benefit will rise from about $1,927 a month to $1,976. For many seniors who depend on the money for groceries, medicine and other staples, the boost is crucial.
Services that could be impacted
Although the Social Security payments as such would not be held back, certain SSA services will be disrupted in case of a government shutdown. The SSA has developed strategies that will allow only essential activities, the ones responsible for timely payment processing, and has suspended all non-essential operations.
- Possible service disruptions: Benefit verifications, the processing of new applications, and replacement Social Security cards will not be processed in the event of a shutdown. Beneficiaries needing these services “will generally experience delays or be unavailable until the funding resumes”.
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