Protecting and Preserving Social Security Act

This bill would change how Social Security cost-of-living adjustments (COLAs) are calculated and how very high earnings are treated. It tells the Labor Department to create a price index focused on older Americans and uses that index to set Social Security COLAs, so benefits better reflect seniors’ costs. Increases from this change would not count against you for SSI or Medicaid eligibility or benefit amounts .

For people with earnings above today’s Social Security tax cap, a portion of those extra wages and self-employment income would again be subject to Social Security taxes starting after 2025/2026. In return, those above-cap earnings would also count toward your future benefit, at small add-on rates: 3% up to a set “bend point” and 0.25% above that. The bend point is $8,933 for people first eligible in 2026 and will rise with national wages after that. These benefit changes apply to people who first become eligible for retirement or disability benefits after 2025 .

• Key details
  • Who is affected: Social Security beneficiaries (current and future), especially seniors; high earners with wages or self-employment income above the current cap; SSI and Medicaid recipients who also receive Social Security .
  • What changes:
    • COLAs switch to an index built for people 62+ (CPI-E) .
    • Some earnings above the cap are taxed for Social Security again and will slightly boost future benefits (3% up to a bend point; 0.25% above) .
    • COLA increases from this bill won’t hurt SSI/Medicaid eligibility or amounts .
  • When:
    • New COLA method takes effect for calculation periods ending on or after September 30 of the second year after the bill becomes law .
    • Above-cap wage rules apply to pay in years after 2025; self-employment rules apply to tax years during or after 2026 .
    • Benefit formula changes apply if you first become eligible after 2025; the new bend point starts at $8,933 in 2026 and then grows with wages .