[NYAPRS Enews] Social Security Announces 3.6% Benefit Hike for 2012

[Harvey Rosenthal]

Social Security Announces 3.6 Percent Benefit Increase for 2012

Cost-of-Living Adjustment is First Since 2009    October 19, 2011

 

Monthly Social Security and Supplemental Security Income (SSI) benefits
for more than 60 million Americans will increase 3.6 percent in 2012,
the Social Security Administration announced (recently).

The 3.6 percent cost-of-living adjustment (COLA) will begin with
benefits that nearly 55 million Social Security beneficiaries receive in
January 2012.  Increased payments to more than 8 million SSI
beneficiaries will begin on December 30, 2011.

Some other changes that take effect in January of each year are based on
the increase in average wages.  Based on that increase, the maximum
amount of earnings subject to the Social Security tax (taxable maximum)
will increase to $110,100 from $106,800.  Of the estimated 161 million
workers who will pay Social Security taxes in 2012, about 10 million
will pay higher taxes as a result of the increase in the taxable
maximum. 

Information about Medicare changes for 2012, when announced, will be
available at www.Medicare.gov <http://www.medicare.gov/> .  For some
beneficiaries, their Social Security increase may be partially or
completely offset by increases in Medicare premiums. 

The Social Security Act provides for how the COLA is calculated.  To
read more, please visitwww.socialsecurity.gov/cola. 

 

NOTE TO CORRESPONDENTS: A fact sheet
<http://www.ssa.gov/pressoffice/factsheets/colafacts2012.htm>  showing
the effect of the various automatic adjustments is attached/below (see
also at http://www.ssa.gov/pressoffice/factsheets/colafacts2012.htm). 

 

Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third
quarter of 2008 through the third quarter of 2011, Social Security and
Supplemental Security Income (SSI) beneficiaries will receive a 3.6
percent COLA for 2012. Other important 2012 Social Security information
is as follows:

Tax Rate:

2011

2012

Employee

7.65%*

7.65%

Self-Employed

15.30%*

15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and
Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to
the applicable taxable maximum amount (see below). The Medicare portion
(HI) is 1.45% on all earnings.

* Section 601 of the Tax Relief, Unemployment Insurance Reauthorization,
and Job Creation Act of 2010 reduced, for wages and salaries paid in
calendar year 2011 and self-employment income in calendar year 2011, the
OASDI payroll tax by 2 percentage points, applied to the portion of the
tax paid by the worker and the self-employed individual.

 

 

Maximum Taxable Earnings:

2011

2012

Social Security (OASDI only)

$106,800

$110,100

Medicare (HI only)

N o   L i m i t

 

Quarter of Coverage:

2011

2012

Earnings needed to earn one Social Security Credit

$1,120

$1,130

 

Retirement Earnings Test Exempt Amounts:

2011

2012

Under full retirement age

NOTE: One dollar in benefits will be withheld for every $2 in earnings
above the limit.

$14,160/yr.
($1,180/mo.)

$14,640/yr.
($1,220/mo.)

The year an individual reaches full retirement age

NOTE: Applies only to earnings for months prior to attaining full
retirement age. One dollar in benefits will be withheld for every $3 in
earnings above the limit.

There is no limit on earnings beginning the month an individual attains
full retirement age.

$37,680/yr.
($3,140/mo.)

$38,880/yr.
($3,240/mo.)

 

Social Security Disability Thresholds:

2011

2012

Substantial Gainful Activity (SGA)
     Non-Blind
     Blind


$1,000/mo.
$1,640/mo.


$1,010/mo.
$1,690/mo.

Trial Work Period (TWP)

$720/mo.

$720/mo.

 

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age:

2011

2012

 

$2,366/mo.

$2,513/mo.

 

SSI Federal Payment Standard:

2011

2012

Individual

$674/mo.

$698/mo.

Couple

$1,011/mo.

$1,048/mo.

 

SSI Resources Limits:

2011

2012

Individual

$2,000

$2,000

Couple

$3,000

$3,000

 

SSI Student Exclusion:

2011

2012

Monthly limit

$1,640

$1,700

Annual limit

$6,600

$6,840

 

Estimated Average Monthly Social Security Benefits Payable in January
2012:

Before
3.6% COLA

After
3.6% COLA

All Retired Workers

$1,186

$1,229

Aged Couple, Both Receiving Benefits

$1,925

$1,994

Widowed Mother and Two Children

$2,455

$2,543

Aged Widow(er) Alone

$1,143

$1,184

Disabled Worker, Spouse and One or More Children

$1,826

$1,892

All Disabled Workers

$1,072

$1,111

 

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