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As inflation pressures continue, lawmakers are advancing a $2,400 annual benefit increase—equivalent to $200 extra per month—for Social Security, SSI, and SSDI recipients under the proposed Social Security Expansion Act.
More than 72 million Americans depend on Social Security or SSI for financial stability. Though the 2.5% COLA was approved for 2025, this new proposal aims to provide an additional monthly boost and revamp benefit calculations.
What the $2,400 Benefit Increase Covers
The Social Security Expansion Act proposes:
- $2,400 per year extra – $200/month for all current and future recipients
- Updating the COLA formula from CPI‑W (Consumer Price Index‑W) to CPI‑E (Elderly) for better cost tracking
- Raising the payroll tax cap: applying the 12.4% rate to all income above $250,000, including capital gains—rather than maxing at ~$176,100
Senators Sanders, Warren, and Representative Hoyle spearheaded the bill, aiming to balance benefit expansions with long-term trust fund protection
Current vs. Proposed 2025 Benefit Summary
| Program/Item | 2025 COLA Benefit | With Proposed +$2,400/yr |
|---|---|---|
| Social Security (average retired worker) | $1,976/mo | $2,176/mo |
| SSI Individual | $967/mo | $1,167/mo |
| SSI Couple | $1,450/mo | $1,650/mo |
| SSDI (average disabled worker) | $1,580/mo | $1,780/mo |
| Max retirement benefit (FRA) | $4,018/mo | $4,218/mo |
Why Shift to CPI‑E for COLA Matters
Currently, COLA adjustments use CPI‑W, which tracks urban workers’ expenses. The new CPI‑E index better reflects seniors’ cost patterns—higher health care and prescription drug expenses—resulting in more accurate yearly benefit adjustments.
How Is This Funded?
- Remove the payroll tax ceiling: 12.4% payroll tax on income above $250,000, including self-employment and investment income
- Trust fund solvency projected to extend by 75 years under this model
- Combines Old-Age and Disability trust funds, strengthens minimum benefits, restores student eligibility to age 22, and improves overall benefit stability
These provisions aim to safeguard Social Security while boosting benefits.
Where the Bill Stands Today
- Introduced in 2025; referred to the Senate Finance Committee, but not yet passed
- Faces political debate but has strong support from progressives and advocacy groups
- If approved, beneficiaries will automatically see an additional $200 per month, disbursed per regular Social Security and SSI schedule
What You Should Do Now
- Stay informed on bill status via Congress.gov or official Senate portals
- Monitor your mySocialSecurity account for notices on COLA changes
- Plan future income, retirement, and taxes based on potential additional income
The proposed $2,400 annual increase (via $200 monthly) pairs with the existing 2.5% COLA and a switch to CPI‑E, promising meaningful benefit increases for tens of millions in 2025.
Funded by a fairer payroll tax, the initiative strengthens Social Security’s future. Yet its impact hinges on Congressional approval—stay alert and prepare now for potential benefit enhancements.
FAQs
Who qualifies for the extra $2,400/year Social Security benefit?
All current and future retirees, SSI, SSDI, survivors, and family benefit recipients would automatically benefit if the bill is enacted.
How does CPI‑E change my COLA?
By using Consumer Price Index for the Elderly, COLA will better reflect seniors’ real expenses—especially higher healthcare costs, resulting in larger annual increases .
Will the $2,400 benefit boost cost me in taxes?
No. The funding comes from extending payroll taxes on high-income earners—not from raising taxes on current Social Security recipient.