Relief checks: summary news 2 January
Headlines: Monday, 2 January 2023
- Cost of living adjustment (COLA) comes into effect, increasing benefits by 8.7%.
- Last Friday, Congress passed a $1.7 trillion spending bill to fund government through September
- Supreme Court to hear two challenges to student loan forgiveness plan in February
- Medicaid eligibility to be slashed later this year after pandemic-era expansion
- US inflation slowed to 7.1% in November
- Fed continues to raise interest rates as inflation starts to ease
- Minimum wage to rise in several US states in 2023
Related news stories:
Back in 2022, as inflation was a a 40-year high, the Social Security Administration (SSA) announced an historic increase for beneficiaries. This massive boost to payments was supposed to reflect the rampant price rises that were devaluing savings and income.
Each year the SSA implements a cost-of-living adjustment (COLA), which is designed to increase benefits in line with inflation. Starting this month an 8.7% increase will be applied to monthly payments, one of the largest COLA increases on record, with Veterans Affairs recipients also in line for the boost.
Corporation tax increase goes live
Last year President Biden signed into law the Inflation Reduction Act, which comprised a variety of measures designed to help redistribute from the wealthy. One element of the package were changes to the corporation tax system which will see the biggest companies hit with a 15% tax rate which went live on 1 January 2023.
After signing the legislation, Biden said that it would help to cut the federal deficit "by having the wealthy and big corporations finally begin to pay part of their fair share," while "no one earning less than $400,000 a year will pay a penny more in federal taxes."
Medicare was designed to broaden healthcare coverage in the United States by making a series of government-backed insurance options. However, while they often represent good value, they are not free for most recipients.
Many seniors are breathing a sigh of relief after the Center for Medicare and Medicaid (CMM) announced that the premium for Medicare Part B would be lowered from $170.10 paid by beneficiaries in 2022 to $164.90 in 2023.
Here's everything you need to know...
Wages aren't keeping up with inflation in the United States
Americans suffered with high inflation throughout 2022, seeing the price of essentials like grocery and gasoline soar and not receiving adequate pay increases to cover the extra cost. So why don't wages go up in line with inflation in most cases? This report from CNBC explains why consumers in the US are feeling the pinch of inflation...
Food bank usage is on the rise
Across the country food banks are being stretched to the limit as households are struggling to cover the cost of essentials. Inflation was running extremely hot throughout much of 2022 and wages have largely failed to keep up with price rises. This has left millions of Americans forced to rely on food banks for their groceries.
The California Franchise Tax Board (CFTB) has sent payments for the Middle Class Tax Refund to over 17 million Californians. The inflation relief support, which range from $200 to $1,050, has been sent as either direct deposit or debit card.
While most of those receiving the support should have seen the money deposited in their bank account by 14 November, the mailing of debit cards follows a separate schedule. Debit cards are sent to those for whom the CFTB does not have a bank account on file.
Here's when the remaining payments will be sent out...
When will I get Student Loan Forgiveness?
The much-debated Student Loan Forgiveness program President Biden introduced last year will wipe up to $20,000 from the debt burdens of millions of borrowers. But it is one of four initiatives in the works that will offer financial relief to student debt borrowers.
Here's what you need to know about the four programs...
There's never an easy time to buy a house, but the economic conditions in recent years have made it even more difficult than normal. The past few years have seen great upheaval in the United States’ housing market, a period of instability sparked by the covid-19 pandemic in early 2020.
After this fluctuation it is difficult to predict where the housing market will go in 2023, but Forbes spoke to a number of real estate experts to get their take on the outlook for the year ahead…
Housing market slows as stock piles up
The past few years have seen great upheaval in the United States’ housing market, a period of instability parked by the covid-19 pandemic.
At first the economic shutdown left interest rates, and therefore mortgage rates, on the floor. However to address sustained high inflation during 2022 the Federal Reserve instituted a number of interest rate hikes, making borrowing especially expensive.
This has led to a considerable slowdown in sales and the number of homes on the market has swelled.
Minimum wage boosts go into effect across the country
Workers in California will now receive at least $15.50 per hour after the state's employment laws upped the minimum wage. The Golden State was one of 23 states to introduce a minimum wage increase at the start of 2023, with another four set to impose a boost later on this year.
Americans don’t need to be reminded that prices have been rising, they just need to go to their local supermarket. However, on the bright side, the high inflation over the past year meant that the income thresholds for the seven federal tax brackets got a generous increase.
Here’s a look at what has changed for 2023...
The maximum retirement benefit one could receive in 2022 is $4,558 per month. However, this is only for people who retire at 70 beyond the full retirement age of 67. For the majority of Americans, the maximum retirement payment will be $3,636, which will apply to those people retiring at the full retirement age of 65 - 67, depending on the year they were born.
How is insulin changing in 2023?
For medicare enrollees, the price of insulin is capped at $35 per month. For many Americans, the price can be as high as $900 a month for the life saving drug. This measure was to be expanded to all those on private healthcare insurance but was blocked by Senate Republicans.
The United States, like many nations around the world, has been reeling from high inflation. The price of food, fuel and really just about everything has been rising at a pace not seen since the 1980s.
While households contend with increasing costs, those whose income gets adjusted every year automatically to keep up with inflation got some good news. The Social Security Administration released its 2023 cost-of-living adjustment (COLA). At 8.7 percent, it was historically big but not even close to one the year President Ronald Reagan got elected.
COLA boost is on its way this month
Inflation caused havoc for Americans throughout 2022, but after a year of near-constant price rises there is something to look to for Social Security recipients. Anyone in receipt of benefits from the Social Security Administration (SSA) will start to receive a 8.7% boost to their monthly payments starting this month as the annual cost-of-libving adjustment (COLA) kicks in.
The New Year has got off to a positive start for workers in the 23 states have announced increases to the minimum wage from 1 January 2023. While the federal minimum wage remains a paltry $7.25 per hour, most states have implemented their own regulations, often raising that figure considerably.
Increases in the minimum wage are considered vital in many areas due to the rampant inflation experienced during 2022.
Here's the states who will be offering their residents a minimum wage increase...
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The passing of Congress’ $1.7 trillion omnibus package provided the funding required to prevent a partial government shutdown over the holidays. That bill was required to keep federal programs running for 2023, but some major changes were included in the final package to ensure it passed.
Chief amongst those changes was a provision that will allow states to remove millions of people off Medicaid from April 2023. The Kaiser Family Foundation estimates that roughly 20% of current recipients could lose Medicaid coverage.
Biden promises more action on inflation
In a world where inflation is rising at double digits in many major economies around the world, inflation is coming down in America.
Make no mistake — prices are still too high. We have a lot more work to do. But things are getting better, headed in the right direction.
What do experts expect from inflation in 2023?
It was the defining economic trend of 2022, but after positive growth reports in recent months is inflation going to continue into the New Year? The Federal Reserve has been extremely proactive in bringing down the rate of price rises but it remains to be seen if that effort can be sustained in the year ahead.
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Now that 2023 has begun some eager filers will already be looking ahead to the upcoming tax season in the United States. Most of the pandemic-era tax relief initiatives have now ended and we’re back to normality when it comes to tax filing.
If you’re thinking about starting your tax filing, you should be aware of the updated standard deduction thresholds for 2023....
Egg prices soar as inflation bites
Inflation has been felt right across the board throughout 2022 and grocery bills have been one of the most susceptible to price rises. One of the products that has risen most sharply is a household staple; eggs. According to official figures from the United States Bureau of Labor Statistics, the price of eggs has reached a record high in the country.
Currently, a dozen Grade A eggs are $3.60, when last year around the same time the price was $1.82. Large Midwestern eggs have fetched a price of $5.60, according to Egg Price Current; which means that prices are up about 49 percent compared to a year ago.
The $1.7tn spending bill, explained
President Biden has signed into law a $1.7 trillion omnibus spending bill to avert a partial government shutdown. The massive package drew bipartisan support in Congress and will ensure that the government is able to continue with its work into the New Year.
Here's what the mammoth spending bill contains...
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