November 30, 2012
Social Security Administration Announces 2013 Cost-of-Living Adjustments
-- The SSA revealed in October that the more than 60 million Americans who receive Social Security disability and retirement benefits will see a 1.7 percent boost in their monthly checks in 2013 due to the latest COLA. --
November 30, 2012 /24-7PressRelease/ -- People who receive for Social Security retirement and disability benefits all have one thing in common: they are generally among those Americans who must get by on a fixed income. Nonetheless, Social Security benefits are subject to annual cost-of-living adjustments (COLAs), and increases for 2013 have been announced by the Social Security Administration (SSA).
The SSA revealed in October that the more than 60 million Americans who receive Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI) and retirement benefits will see a 1.7 percent boost in their monthly checks in January due to the latest COLA. (SSI increases take effect on December 31, 2012.) For an average beneficiary who currently receives $1,113 per month, this will mean an increase of nearly $19 per check.
The point of yearly calculation of a COLA is to make sure that retirees as well as SSDI and SSI beneficiaries do not see their limited purchasing power eroded due to inflation. Cost-of-living adjustments are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) prepared by the U.S. Bureau of Labor Statistics, and increases are authorized whenever the CPI-W rises by at least 0.1 percent.
The SSA has also announced that the amount of income subject to the Social Security tax will rise from $110,100 to $113,700 in 2013, a 3.3 percent increase. This means that people who earn more than $110,100 will see an increase in the amount of their payroll taxes.
The 2013 COLA figure is relatively low in comparison to historical averages. While both 2010 and 2010 were the only years when no increase in Social Security retirement and disability benefits was authorized, most years have seen increases in excess of 2.5 percent. The highest COLA ever calculated was 14.3 percent in 1980, and as recently as 2009 SSDI and SSI benefits increased by 5.8 percent over the previous year.
How are individual disability benefits calculated?
While the recently announced increase in disability benefits applies across the board to all recipients, individual SSDI benefit amounts are based on the applicant's lifetime average earnings covered by Social Security. (SSI benefits for those who do not qualify for Social Security are based on financial need.) The SSA provides an online disability benefit calculator to allow individuals to estimate the amount they would receive for a current disability.
Other family members, including spouses, children and divorced spouses, may also be eligible for benefits of up to 50 percent of the recipient's monthly benefit. A Social Security disability attorney can explain this and all other aspects of the application process, including the mandatory waiting period and back pay reaching to the onset of the disability.
Article provided by Crowe & Shanahan
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