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Social Security Reforms: New Cost-of-Living and Contribution Rules

This act modifies how Social Security benefits are calculated, including retirement and disability payments. Key changes involve using a new inflation index for seniors and adjusting how contributions are assessed on higher incomes, potentially impacting future benefits and financial obligations for citizens.
Key points
Introduction of a new inflation index (CPI-E) for individuals aged 62 and older, which may affect the annual cost-of-living adjustments for Social Security benefits.
Changes to how contributions are calculated on earnings above the current limit, meaning high-income earners will gradually pay contributions on a larger portion of their income, eventually covering all income after 2031.
Inclusion of surplus earnings in the Social Security benefit formula, potentially increasing future retirement and disability benefits for higher earners.
Benefit increases resulting from these changes will not affect eligibility for Supplemental Security Income (SSI) and Medicaid programs.
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Status: Introduced
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Additional Information
Print number: 119_S_2614
Sponsor: Sen. Hirono, Mazie K. [D-HI]
Process start date: 2025-07-31