Social Security recipients will receive some extra cash soon. By mid-July the majority of Social Security recipients will receive a one-time payment of about $19. Many will also receive slightly higher monthly benefits starting in August. The extra benefits make up for an underpayment blamed on a computer software glitch that caused the Bureau of Labor Statistics to understate the rate of inflation. The error caused Social Security to pay Cost-of-Living Adjustments (COLAs) that started in January 2000 at 2.4% instead of 2.5%, affecting benefits paid from January 2000 through July 2001.
Each Social Security recipient will receive a one-time retroactive payment in July which represents what would have been received had the error not occurred. For the majority of recipients that shortfall is about $1 per month, but those who receive higher monthly benefit payments will receive larger retroactive payments.
In addition monthly benefits will be fully adjusted on the recalculated CPI. Many, but not all recipients, may see a change in their monthly benefit.
Source: `Beneficiaries to Get Reimbursement` The Associated Press, April 28, 2001.
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