Increase in monthly Social Security Disability benefits; medicare premiums increase
Posted on Dec 18, 2013
The Social Security Administration (SSA) has announced that monthly Social Security and Supplemental Security benefits will increase in 2013. The 1.7% cost-of-living adjustment (COLA) will impact nearly 62 million retired and disabled Americans who receive these benefits.
The COLA is designed to make sure that Social Security benefits keep pace with inflation, and is determined based on the Consumer Price Index. Lower inflation means a lower COLA. When there is no change in the Consumer Price Index, there is no COLA increase. Thus, the COLA in 2010 and 2011 was zero.
The 2013 COLA is significantly lower than the 3.6% increase seen in 2012, but will still have a noticeable impact on Social Security benefit recipients. For instance, a disabled worker receiving $1,113 in monthly Social Security Disability (SSDI) benefits in 2012 will now receive $1,132 per month with the 2013 COLA in place, representing an increase of $228 per year in benefits.
For those still working, the adjustment in COLA means that Social Security payroll taxes in 2013 will apply to $113,700 of income, up from $110,100. Additionally, this change means that $1,160 of earnings is now required to earn one Social Security credit, up from $1,130 in 2012.
The COLA increase will also impact Medicare premiums, although the exact amount of Part B premiums has not yet been determined. These changes, when announced, will be available at www.Medicare.gov.