WASHINGTON, D.C. — A bill introduced by Senate Democrats could increase monthly Social Security payments by $200 for millions of Americans starting in 2026.
The Social Security Expansion Act, introduced in the Senate in February, proposes a $200 monthly increase in benefits for all recipients beginning in January next year.
The bill aims to provide inflation relief and strengthen long-term wealth of the Social Security program. In addition to the benefit boost, the legislation includes changes to how cost-of-living adjustments are calculated, expands eligibility for certain dependents and introduces new tax measures to fund the program.
Other key provisions in the bill:
- COLA reform: Shifts the cost-of-living adjustment formula from the CPI-W to the CPI-E, which means, instead of the current method, which tracks costs for working-age households, the new approach would focus on expenses seniors typically face, like healthcare, housing and prescription drugs.
- Minimum benefit increase: Raises the minimum monthly benefit for lifetime low earners based on years worked, with a sliding scale that reaches 125% of the poverty line for those with 30+ years of work.
- Extended benefits for students: Expands eligibility for child benefits to full-time students up to age 22, including those whose parents are disabled or deceased.
- Payroll tax expansion: Applies Social Security payroll taxes to earnings above $250,000, removing the current income cap.
- Self-employment and investment tax changes: Increases taxes on net earnings from self-employment and raises the investment income tax rate from 3.8% to 16.2% to help fund Social Security.
- Trust fund consolidation: Merges the Old-Age and Survivors Insurance and Disability Insurance Trust Funds into a single Social Security Trust Fund for streamlined management and reporting.
The proposed $200 monthly boost would come on top of the 2.8% cost-of-living adjustment (COLA) which will take effect in January next year.
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