Two Main Groups Could See Social Security Benefit Increases

A new proposal is gaining attention in the United States, aiming to increase Social Security benefits for two groups that often go overlooked: caregivers and older workers in physically demanding jobs. These proposed changes come as concerns about the future of the Social Security programme grow amidst projected funding shortfalls.

Growing Concern over Social Security’s Future

Social Security is a critical lifeline for millions of Americans, but its future remains uncertain. According to the Social Security Administration, the Old-Age and Survivors Insurance (OASI) Trust Fund will only be able to pay full benefits until 2033. After that, it is projected to cover just 77% of the benefits that are currently scheduled.

This looming shortfall has sparked widespread concern, with many retirees worried about the potential for reduced benefits. In light of this, a recent survey conducted by the National Academy of Social Insurance (NASI), in collaboration with AARP and other advocacy groups, showed that 85% of Americans are willing to raise taxes to help secure the programme’s future.

The Proposals: A Lifeline for Caregivers and Older Workers

The proposal under consideration seeks to address some of the challenges faced by two specific groups: caregivers and older workers in physically demanding occupations.

Caregiving Credit for Parents

One of the major proposals is the introduction of a caregiving credit for individuals who take time off work to care for children under six. These caregivers often face a significant penalty when it comes to their future Social Security benefits, as their earnings history is interrupted.

This proposal, which aims to close this gap, would allow caregivers—especially women, who are more likely to take on the primary caregiving role—to receive credits that boost their retirement benefits.

Bridge Benefit for Older Workers

Another key aspect of the proposal is the creation of a bridge benefit for older workers in physically demanding jobs. Many of these individuals face health problems that lead them to retire earlier than expected, which often results in lower Social Security payments.

The bridge benefit would help protect these workers from the early retirement penalty, ensuring that they receive more equitable support based on the nature of their careers.

Broad Support Across Political Lines

The NASI survey, which was conducted in collaboration with a number of organisations, found that there is broad bipartisan support for these proposals. Nearly 60% of respondents expressed support for the caregiving credit, and over 60% backed the bridge benefit for older workers.

In order to fund these enhancements, the study suggests several changes that have also garnered widespread support. A significant portion of respondents (82%) favoured eliminating the cap on payroll tax contributions for earnings above $400,000. Additionally, there is strong backing for gradually increasing the payroll tax rate from 6.2% to 7.2% for both employers and employees.

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