This bill would change how Social Security keeps up with prices and how it treats very high earnings. It would direct the government to create a price index focused on older adults and use it to set yearly Social Security cost‑of‑living increases. These increases would start being calculated with the new index in the second year after the law takes effect, and they would not be counted against someone’s eligibility for SSI or Medicaid .

It would also require Social Security taxes on part of wages and self‑employment income above today’s cap, starting after 2025, using a set percentage from a table in the law. In return, some of those extra earnings would count toward future benefits, but at much smaller rates than regular earnings. The bill creates a new way to measure those “surplus” earnings and adds them to the benefit formula at 3% up to a set level and 0.25% above that, for people who first become eligible for benefits after 2025 .

Key points

• Who is affected: Current and future Social Security beneficiaries; workers and the self‑employed, especially those with earnings above the Social Security wage cap; SSI and Medicaid recipients are protected from losing eligibility due to these changes.
• What changes: Cost‑of‑living increases would use a senior‑focused price index; part of pay above the current cap would be taxed for Social Security; some of those extra earnings would slightly increase future benefits through a new “surplus earnings” calculation .
• When: COLA changes start in the second year after enactment; payroll changes apply to wages paid after 2025 and to self‑employment income in tax years starting in 2026; the new benefit formula applies to people who first become eligible for benefits after 2025 .