After a paralyzing back injury, Vanessa Vallon, age 36, relies on Social Security disability benefits. So, like many recipients, when she heard about the Social Security Administration's cost of living increase of 8.7 percent last year, she hoped the boost in payments would make her life easier—not harder.
Vallon, who lives in Louisiana, first started receiving disability benefits in 2019. A back injury saw her temporarily paralyzed from the waist down and in need of mobility aids just to relearn how to walk. At the same time, Vallon was on a range of medications that brought unpleasant side effects.
"Initially, it was enough money to cover the necessities," Vallon told Newsweek, adding that she would also work part-time driving for Uber and DoorDash.
When Vallon, who used to work in insurance call center customer service, returned to work in October 2021, she struggled with her health on and off. After going through her allotted time off and medical exemptions, she lost her job less than two years later.
Then Vallon looked to find a work-from-home job, but once again, the continuing effects of her back injury flared up again, rendering her unable to work. She wasn't able to sit or stand for long periods of time while completing her job tasks, so, running out of options, she applied once again for Social Security disability benefits.
"I finally received my monthly benefits in February 2024 with a back payment to cover the months I was unemployed dating back to May 2023," Vallon said. "Over half of that money had to be paid back to family and friends that helped me pay bills when my savings ran out, as well as paying off a maxed-out credit card, with the rest going back into savings to ultimately go towards a new vehicle."
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Once the money had mostly disappeared, Vallon found herself left with just scraps, but the recent cost of living adjustments saw her in an even more dire situation. Because of the 3.2 percent bump in Social Security payments this year as well as the larger 8.7 percent increase in 2023, many of the other benefits Vallon relied on are disappearing entirely.
For one, the state notified Vallon that her food stamps, which used to be $291 each month since July of last year, would now be slashed to just $23 monthly.
But Vallon is also facing extra hurdles when it comes to healthcare. While Vallon qualifies for dual coverage of Medicare and Medicaid, she used to always have Medicaid cover her monthly premiums and coinsurances.
Now that her income is above the $1,215 threshold, however, she's been told she's fully responsible for the coinsurance costs. And using a Medicare Advantage plan has only mitigated the effects slightly.
"I went with a Medicare Advantage plan this year, so I get a spending benefit card of $245 a month to put towards some food, supplements and gas," Vallon said. "The frustrating part is that this new Advantage plan doesn't cover the same doctors I always went to, so I'm having to find new providers and I can't go back to original Medicare because I desperately need this spending benefit card."
Today, Vallon's monthly budget should theoretically cover her expenses, but she has to make many sacrifices. Every time she drives, she's aware of how one repair could break her budget.
She also relies on her boyfriend's support when she comes up short on grocery costs each month. And as their home requires many repairs, even with low rent, they don't see a way to get the place fixed anytime soon.
"It's very frustrating to have to do your budget each month and figure out how much doctor appointment coinsurance can I afford this month before I have to schedule them for the next month, just so I can afford my healthy foods and supplements," Vallon said.
If Vallon does need something urgent for her car, house or even dog, she has to do the calculations in her head to see if she can truly afford it. This, while being no longer able to do delivery work because of her car's condition, can create a financial minefield.
"To expect anyone to be able to live on only $16,032 a year without EBT food help and without helping to cover coinsurance when you have to constantly go to physical therapy is a cruel joke," Vallon said.
"I feel like this system in America is designed to either keep you in poverty or force you to work outside of your abilities, leading to poorer health. The COLA is not helping us because we need every agency on board to help instead of cutting us off and leaving us with scraps."
As Vallon continues to search for a part-time job, she is concerned about how the government's failure to consider the impact of the COLA on benefits many other recipients are also in need of.
"It frustrates me how little the government is willing to help its people, instead only supplying the bare minimum and keeping the poorest citizens in poverty like this," Vallon said.
Vallon is not alone in her plight.
When the Social Security Administration increased payments by 8.7 percent to help offset inflation in 2023, seniors' benefits rose by an average of $147. This pushed many into the non-eligible territory for Medicare payments and food stamps.
The COLA can also push seniors into a higher tax bracket and often forces them to pay taxes on their benefits whereas they hadn't before the COLA boost.
Today, around 25 million Americans aged over 60 live at or below 250 percent of the federal poverty line, according to the National Council on Aging.
Even for those who don't get pushed out of their other benefits, seniors have been criticizing the COLA's inability to fully make up for the inflation retirees and those on disability face already.
Some say because the COLA looks at the consumer price index for urban wage earners and clerical workers (CPI-W), it doesn't totally reflect reality for seniors, according to financial advisor Roksolana Ponomarenko.
"This discrepancy primarily arises because the CPI-W measures spending patterns of employed individuals, not retirees who tend to spend more on healthcare and housing, sectors where prices have been rising more rapidly than the overall inflation rate," Ponomarenko told Newsweek.
These seniors then can find themselves in dire straits as they're unable to cover the pricing jumps in healthcare and housing.
"It's a classic case of 'too little, too late,' as the COLA lags behind real-time increases in living expenses, leaving seniors to bridge the gap with their dwindling savings," Ponomarenko said.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Suzanne Blake is a Newsweek reporter based in New York. Her focus is reporting on consumer and social trends, spanning ... Read more
