Social Security snag

The news that Social Security benefit amounts will remain flat next year isn’t sitting well with older Kootenai County residents already feeling squeezed by higher prices for many basic living items.

Federal agencies announced Thursday that no cost-of-living adjustment, or COLA, would be applied to Social Security payments received monthly by millions of retirees, disabled workers, spouses and children. The Social Security Act provides for automatic COLAs whenever the Consumer Price Index measures an increase in inflation. The CPI, also released Thursday, saw zero increase in the last year, primarily due to a decline in spending on gasoline and fuel oil.

“I am wondering, is that going to happen every year?” said Jean Justesen, 72, of Coeur d’Alene. “With gas prices, they go up, then they go down, then back up. You know you can’t make that decision based on that. It has always fluctuated.”

This is just the third time since 1975, when automatic Social Security adjustments were adopted, that there has been no COLA. There were no adjustments in 2009 and 2010.

Randy Simon, spokesman for AARP Idaho, said Social Security recipients rely on the annual COLA bump to pay for many expenses that are not adequately included in the COLA calculation. Last year, and in 2012, the COLA was 1.7 percent. The 2013 COLA was 1.5 percent. The average since 1975 is 4 percent.

“In fact, retired families have different spending patterns than people who are still working — most notably they tend to spend more on health care, where prices have consistently risen faster than overall inflation,” Simon said.

Shirley Collinson, 79, of Coeur d’Alene, said she feels that calling off this year’s COLA due to lower gas prices is unfair when other costs of living have increased.

“I went to the grocery store the other day. I couldn’t believe how the prices have just started to jump up,” Collinson said.

The food index accelerated .4 percent in September, the greatest increase since May 2014, according to the U.S. Bureau of Labor Statistics. The annual increase was 1.6 percent.

Some policy researchers believe the method of calculating COLA is flawed when it comes to seniors. According to Alicia Munnell and Anqui Chen, analysts at the Center for Retirement Research at Boston College, seniors come out on the losing end, even in years when there is an automatic cost-of-living adjustment.

That’s because the price index used to calculate COLA includes consumers of all ages. According to an experimental price index for consumers 62 and older, the elderly allocate twice as much of their budgets to medical care when compared to the population as a whole.

“Thus, using an index for the whole population does not compensate the elderly for the extra dollars they need to pay for their medical costs, forcing them to cut back on their non-medical-care spending,” wrote Munnell and Chen, hinting at a possible policy solution. Adrian Mott, 79, of Hayden, blames Washington, D.C. lawmakers.

“I believe that they are trying to get money any way they can in politics, and Social Security is the easiest one they can hit,” Mott said. “ ... When money is taken away from me, that means I have to do something to make up for the difference the next month. It may just be a little below what I need, but then the next month it’s a little bit more below, till eventually I’ve got to mortgage the house and everything else. It’s just a matter of taking away from the elderly who don’t have anything to give.”

“Gas is kind of a small area to point at when you start calculating the cost of living,” said Greg Thornton, 68, of Coeur d’Alene. “Medical prices have gone up. Everybody’s insurance prices have gone up too ... They have been looting Social Security since the ’50s for different projects.”

On average, Idaho retirees receive about $1,217 a month from Social Security, said AARP Idaho’s Randy Simon. The average yearly Social Security benefit in Idaho is around $14,600.

Roughly 23 percent of Idaho Social Security recipients rely on Social Security for 90 percent or more of their income, and about 52 percent rely on Social Security for 50 percent or more of their income.

There are about 25,000 Kootenai County residents 65 or older, according to the U.S. Census Bureau. About 2,000 of the county’s senior residents are living on incomes below the federal poverty level, currently $11,770 for individuals and $15,930 for families of two.

Alison McArthur, executive director of the Post Falls Senior Center, said not getting a raise in their Social Security checks will be devastating for many already financially beleaguered seniors.

She said at the center, they hear from seniors who say they are living on less than $500 per month.

Older, cash-strapped community members are shunning medical care when they need it, she said, because they can’t afford the price of a trip to the emergency room or an urgent care office.

“They are giving up their transportation, sitting home alone in social isolation,” McArthur said. “They’re not buying the food they need to keep up their stamina.”

During an energy fair held last week at the center, McArthur and others learned many seniors are also going without electricity. They are turning on space heaters and buying blankets rather than turn on their heat.

An increasing number of seniors are staying at the center for longer periods of time, to avoid being cold and alone in their homes, she said.

McArthur suggests those who want to help should call their senators and congressmen.

“Make donations to your senior centers to make sure our seniors have a warm place to eat,” McArthur said.

Staff writer Jamie Sedylmayer contributed to this report.

Contact Maureen Dolan at mdolan@cdapress.com or @maureendolancda.