Personal income in May dipped for the first time since 2021, according to government data, but people aren’t actually getting paid less.
Income fell by 0.4% in May after climbing 0.8% in April, but it was a change in Social Security payouts that drove that decline.
“The outsize income gain in April was primarily pushed up by a one-time spike in Social Security benefits from the implementation of the Social Security Fairness Act,” said senior director of Moody’s Analytics Dante DeAntonio.
The Social Security Fairness Act, a Biden-era piece of legislation that went into effect at the beginning of this year, increased the benefits for more than 2.8 million former public-sector workers whose jobs were not previously covered by Social Security.
One-time retroactive checks were mailed to beneficiaries in late March and April, giving those individuals a one-time boost in monthly income. That’s why it appeared as though income fell in May.
Starting in May, the increased benefits will be factored in monthly, so the income data for the rest of the year should level off.
A recent report from the Social Security Board of Trustees said that the program’s funds could be depleted by 2034.
