Social Security Administration (SSA) will pay the $150 supplemental benefits to eligible retirees despite yesterday’s announcement.

“The SSA Board met with President Surangel Whipps Jr. and the OEK leadership today to discuss the issue and the SSA Board has agreed to pay the benefits until such time that the government takes action on the reform policy for the Social Security Administration,” reported SSA Administrator Ulai Teltull yesterday in an interview with Island Times.

Senator Hokkons Baules and Senator Rukebai Inabo also confirmed that SS supplemental benefit payments will not be stopped, but will be paid by SSA.

Due to the ACH payment system used, the payment for April has already been processed and Administrator Teltull informs beneficiaries that the $150 will not be in this April payment but will be issued in the next month.

“We are working hard to restore the system and release the supplemental benefit at earliest. We have to withdraw the funds first so that once it’s in, the disbursements will continue uninterrupted,” Teltull said.

The announcement issued by the Social Security Administration on Monday informed beneficiaries that the $150 supplemental benefits (funds appropriated by OEK to SSA to cover the cost of living increase expense) will not be paid out starting May 1. The notice informed beneficiaries who use the fund to pay bills or debts that they will need to make other arrangements.

Senator Rukebai Inabo responded with a letter yesterday citing RPPL 11-13, Section 21(a), that charged Social Security to pay the benefits should the funds of $1.9 million appropriated by OEK run out. The letter also states that the SSA’s announcement was inconsistent with this law.

Clarifying the letter, Senator Inabo said that SSA is obligated by RPPL 11-13 to find funds to pay the benefits. “It is in the law. We have appropriated 1.9 million to cover the first $50 and they have to withdraw funds to pay the $100. People should be assured that they will receive their supplemental benefits,” stated Inabo.

In the November 2021 public hearing on this budget bill, SSA Chairwoman Johanna Ngiruchelbad informed OEK that SSA cannot pay the additional benefit once the government subsidy stops.

“If we don’t see a turnaround in the funding level, when the government funding stops, the supplemental benefits should also stop,” said SSA Chairwoman Ngiruchelbad during the hearing on the now RPPL 11-13 budget.

Administrator Teltull said that the war in Ukraine has impacted SSA investments and the loss of about 1,000 employees that left Palau as a result of COVID has affected contributions to Social Security funds.

The $150 supplemental benefit was taken into account in the study of Palau’s Social Security Administration and its future viability.  The report presented at the economic symposium in November 2021 revealed that the Social Security Administration will run out of money in 2031 if no changes are made to the current system.

Social Security Administration collects $21 million each year and pays out $27 million, creating a shortfall of 6 million dollars. 

For Social Security Administration to reach the year 2057, employees’ contribution rate will need to go up to 9% and the retirement age will go up to 65 years of age. These are just two of the reforms needed to be adopted for Social Security to be sustained beyond the year 2031.

“Our Board of Trustees take their fiduciary responsibilities seriously. This is people’s retirement money and they take their responsibility to protect it quite seriously,” emphasized Administrator Teltull.

Senator Jonathan “Cio” Isechal expressed upset that the notice gave people only a week to figure out their finances but according to Administrator Teltull, a letter was sent to the administration advising them that SSA will not be paying the benefits after the government appropriations are depleted.

“Due to the conference and other things going on, I think the notice was overlooked. But we have agreed to pay it until reforms are adopted,” said SSA Administrator Ulai Teltull.

The total SSA supplemental benefit payment ($150 per month) costs around 2 million each year.  This, in addition to regular benefit payments of around $27 million, brings the total benefit payment to $30 million each year. SSA collects $21 million in contributions, creating a yearly shortfall of 8 million dollars. The $8 million is taken out of SSA investments, which stood at $112 million in FY 2020.

The RPPL 11-13 budget law covers FY 2022 and does not amend the Social Security Act. 

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