Typical Social Security Recipient Will Get $4 Benefit Increase in 2017

October 25, 2016

Social Security benefits will rise only slightly in 2017. This follows no increase in benefits in 2016 and small increases for many of the previous years. The small bump in 2017 will likely be eaten up by higher Medicare Part B premiums.

The nation’s more than 65 million Social Security recipients will get a 0.3 percent cost of living increase in payments in 2017. This is expected to raise the monthly payment for the typical beneficiary by $4. Cost of living increases are tied to the consumer price index, and low inflation rates and gas prices means smaller increases. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will increase to $127,200 from $118,500.

The small increase in benefits means that some seniors may face a large hike in Medicare premiums. Most elderly and disabled people have their Medicare Part B premiums deducted from their monthly Social Security checks. For these individuals, if Social Security benefits don’t rise, Medicare premiums can’t either. But this “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who get both Medicare and Medicaid benefits.

Medicare premium increases have not been announced yet, but projections point to a 22 percent increase for the monthly Part B premium. The premium increase is so steep because another law says that premiums must cover increases in Medicare costs.  With 70 percent of Medicare recipients shielded from any premium increase because Social Security benefits are only rising slightly, the entire obligation of paying for the increased Medicare costs is falling on the other 30 percent who are not protected from premium increases.

Last year Congress stepped in and loaned money to Medicare to help cover the premium increase. Advocacy groups are calling on Congress to do something similar this year. However, Congress is not in session until after the election, which means it will not be able to act quickly.

For 2017, the monthly federal Supplemental Security Income (SSI) payment standard will be $735 for an individual and $1,103 for a couple.

For a complete list of the 2017 Social Security benefit levels, click here.

For more information about the increase, click here.

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What Is Undue Influence?

Saying that there has been “undue influence” is often used as a reason to contest a will or estate plan, but what does it mean?

Undue influence occurs when someone exerts pressure on an individual, causing that individual to act contrary to his or her wishes and to the benefit of the influencer or the influencer’s friends. The pressure can take the form of deception, harassment, threats, or isolation. Often the influencer separates the individual from their loved ones in order to coerce. The elderly and infirm are usually more susceptible to undue influence.

To prove a loved one was subject to undue influence in drafting an estate plan, you have to show that the loved one disposed of his or her property in a way that was unexpected under the circumstances, that he or she is susceptible to undue influence (because of illness, age, frailty, or a special relationship with the influencer), and that the person who exerted the influence had the opportunity to do so. Generally, the burden of proving undue influence is on the person asserting undue influence. However, if the alleged influencer had a fiduciary relationship with your loved one, the burden may be on the influencer to prove that there was no undue influence. People who have a fiduciary relationship can include a child, a spouse, or an agent under a power of attorney. For more information on contesting a will, go here.

When drawing up a will or estate plan, it is important to avoid even the appearance of undue influence. For example, if you are planning on leaving everything to your daughter who is also your primary caregiver, your other children may argue that your daughter took advantage of her position to influence you. To avoid the appearance of undue influence, do not involve any family members who are inheriting under your will in drafting your will. Family members should not be present when you discuss the will with your attorney or when you sign it. To be totally safe, family members shouldn’t even drive or accompany you to the attorney’s office. You can also get a formal assessment of your mental capabilities done by a medical professional before you draft estate planning documents. For more information on preventing a will contest, go here.

July 14, 2016

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