
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, July 23, 1990                   TAG: 9007200688
SECTION: BUSINESS                    PAGE: A5   EDITION: METRO 
SOURCE: Mag Poff
DATELINE:                                 LENGTH: Medium

`NOTCH BABIES' AREN'T SO SHABBILY TREATED

Q: Please explain what "notch babies" are. It has recently come to my attention that those of us born between 1917 and 1921 are discriminated against in that all grants of Social Security payments upon retirement are less than all other retired persons - some as much as $2,000 per year. Is this fair? Where does a "notch baby" start to rectify this unfair and, I feel, unlawful position of the Social Security Administration?

A: The 7 million "notch babies" are well organized and vocal, but Congress is unlikely to satisfy their demands. People in this group do receive lower benefits than their immediate predecessors into retirement, but more than those who follow them.

The situation arose in 1972 when Congress passed a law indexing Social Security benefits to the cost of living. The intent was to guarantee that the purchasing power of the average pension would remain at 42 percent of average wages.

Because of improper wording, the law actually increased benefits for new retirees much faster than the rate of inflation. Had the situation continued, people would have retired with benefits higher than their working wages.

The correction Congress made was not retroactive for those who had retired under the act. The situation thus created some bounty babies - those born between 1912 and 1916 who received a windfall when they retired under the new law.

To soften the impact, Congress phased out the windfall over a five-year period. The change became fully effective in 1987, so new retirees again receive an average of 42 percent of wages.

Those who, like you, were born between 1917 and 1921 and retired during the transition period actually receive greater benefits than those who follow you. The demand of the so-called "notch babies" is that the unintentionally high payments received by their immediate seniors continue.

Q: I owe around $6,000 on four major credit cards. Because of unexpected expenses and illness that occurred last year, I am three months behind on my payments. I am trying to pay what I can, but I just can't get them up to date.

Because of this my credit is bad, and I am considered a bad risk to borrow the money to pay off the debt. If I had one payment, everything would be fine.

Do you know where I could find help? Our credit has always been excellent. My husband and I both work and make an average salary. The only other payments we have are our house and car.

A: Consumer Credit Counseling in Roanoke is your answer. The agency is supported by area merchants to help people pay their bills. There is no charge to you if you cannot afford the service.

You should call ahead for an appointment. The agency's toll-free number is 1-800-926-0042. For Roanoke Valley residents the number is 563-0076.

by CNB