January 19th, 2012|
Social Security beneficiaries will receive larger benefits payments in 2012, according to Weho News. What do these increases actually mean?
Effectively taking political issues out of the rate-setting process, a law automatically ties these changes to increases in the Consumer Price Index (CPI), which is affected by inflation.
Because inflation had been so low over the past several years, there had been no increase in benefits and few changes elsewhere. This year is different.
People receiving Social Security benefits–whether it is retirement, disability, survivors, or dependents–are receiving a 3.6 percent increase in their benefits was effective December 1, 2011. The changes will be first seen in the payments sent out in January 2012.
This change will result in a monthly increase of $43 for the average retired worker, $39 for the average disability beneficiary, and $64 for the average disabled worker with a spouse and one or more children.
The adjustment will affect more than benefits. It will also affect the following increases:
- The maximum earnings subject to FICA payroll taxes increases from $106,800 to $110,100;
- The amount of earnings needed to earn one Social Security credit goes from $1,120 to $1,130;
- Substantial Gainful Activity goes from $1,000 to $1,010 per year;
- The amount of income an Early Eligibility Age beneficiary can earn without affecting his SS goes from $14,160 to $14,640 .