Stuck on a fixed income, can’t pay the bills – what do you do?

A 60 year old single male pays $850 a month rent and has an income of $1,164. His vehicle is a rust bucket that needed new brakes resulting in his inability to pay all of his rent. He shared that he needs new underwear and can’t even afford to buy it. He has a serious disability and cannot work. He has been waiting for a determination on whether he will receive Social Security Disability for two years. His focus understandably is on surviving a day at a time.

A 71 year old single woman has experienced it all: homelessness, domestic abuse, severe physical ailments and more. Her social security monthly income is $791 and from that she pays for rent, utilities, food, medicine and anything else she needs. She takes advantage of all sources of support for seniors including Meals on Wheels, senior commodities, River Valley Senior Center’s rides to the doctors and Medicare. She depends on the charity of local churches when something goes wrong in her house. She has zero fat in her budget and dining out is not an option.

Social Security Retirement and Social Security Disability are part of our country’s safety net, providing a fixed monthly income to qualifying people. Before 1935 when Social Security Retirement was instituted, older poor people worked until they died (and died younger), depended on charity, entered poor houses and/or lived with family to survive.

The amount of monthly Social Security Retirement income an individual receives is determined by a number of factors. First and foremost are the number of quarters worked over a lifetime, and at what wages. Low-wage earners and their employers contribute less money to the Social Security system than middle- and high-wage earners. Low-income people may have periods of unemployment, during which no contributions are made to the system. Parents, typically women, take time off from labor force participation to raise children. Women are often employed in low-wage jobs. They earn than males ($0.82 per dollar according to Bureau of Labor Statistics). All these realities lower eventual retirement income. Women in general are hit especially hard. Low-wage earners therefore suffer a lifetime of low incomes because of how the system is set up.

The average monthly retirement payment is $1,430.73. Any changes year to year to benefit amounts is determined by the Bureau of Labor Statistics using what is called the Consumer Price Index for Urban Wage Earners & Clerical Workers. It looks back to the previous years to measure changes in the costs of certain goods and services such as food, clothing, transportation, housing, medical care and furniture. In 2021, recipients received a 1.3 percent increase which is less than the rising cost of living. Because the calculations are in essence a year behind current reality, retirees on low fixed incomes are struggling to keep up with the cost of living in 2021.

People with disabilities usually have a difficult time obtaining Social Security Disability Income (SSDI). It is not unusual for it to take two or more years after initial application to get a determination. Once an application is approved, it takes an additional five months before payments begin. For most people, the amount of payment is dependent on the average amount of lifetime earnings. An applicant has to have accumulated a certain number of work credits recognized by Social Security. Again, if one worked in low-wage jobs, that reduces the amount of disability income. If one did not work very long, the amount of disability income is low. Average SSDI monthly payments range from $800-$1,800. (Note that there are exceptions to the work requirement for people who are blind, the widow or widower of someone qualified as disabled, a disabled child and wounded warriors and veterans.)

Another factor in low safety net benefits is the gig economy. People who work “off the books” don’t pay into Social Security, nor do their employers/customers. It is difficult to ascertain the number of Harbor Country people fixing cars, paying houses, mowing lawns, braiding hair or doing handyman jobs to get by, but then facing the consequences when they retire.

It is unlikely that the majority of retirees and people with disabilities can work. They therefore can’t increase their monthly incomes.

So where is this going? Harbor Country has many more very low-income people on fixed incomes than most of us would believe. They come to Neighbor by Neighbor for help paying bills. They are regulars at area Mobile Food Pantries and sign up for monthly commodities through Southwest Michigan Community Action Agency. They count on supplemental food from Meals on Wheels. In worst cases, they choose between paying bills and buying food or medicines. Some resort to reverse mortgages, thus reducing their estates. They have no margin to handle car and home repairs. Gas prices rise and they can’t fill their cars (if they have them).

Let’s make this more real.

Neighbor by Neighbor serves 35 households containing 44 individuals age 60-plus whose household annual income is $12,000 or less. For adults 59 or younger, 39 households containing 89 individuals live on $12,000/year or less. That is in Harbor Country!

You can help! Neighbor by Neighbor launched an effort called Sponsor a Neighbor: Restoring Dignity and Hope earlier this year in which funds are raised specifically to pay the monthly electric bill for individuals on low fixed incomes. Currently there is sufficient funding to sponsor 11 households, and the average electric bill per client is $3,690 per year.

Whenever possible, Neighbor by Neighbor helps people sign up for either the senior discount or low-income discount through AEP. Neighbor by Neighbor reviews each sponsored client annually to determine whether anything has changed. We have a waiting list of 11 people we would like to sponsor, but we don’t have the money yet. If you are interested in underwriting the electricity bill payment for Neighbor by Neighbor clients, call 269-231-0648 or email peg@neighborbyneighbor.org. Donors to Sponsor a Neighbor can make one-time gifts or pledge a monthly or quarterly amount. Just paying one bill for someone on a fixed income is a huge game-changer, freeing up funds for other necessities and reducing stress.