Social Security Announces 1.7 Percent Benefit Increase for 2015

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 64 million Americans will increase 1.7 percent in 2015, the Social Security Administration announced today. 

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2014. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics. 

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 $118,500 from $117,000. Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum.  

Information about Medicare changes for 2015 is available at www.medicare.gov 

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

A fact sheet showing the effect of COLA related automatic changes for 2015 is here.

Using your SSA Statement

In previous posts, I have encouraged readers to create a personal my Social Security account at www.socialsecurity.gov/myaccount/. Whether or not you now receive Social Security monthly benefits, online services are there for use. To create a my Social Security account, you must be at least 18 years old, have an email address and a United States mailing address. There are no fees to do this. As of September 30, nearly 14.5 million people had opened their free my Social Security account. 

If not yet receiving ongoing benefits, the major tool available is your Social Security Statement.

Many people think only of retirement when Social Security is discussed, but, in fact, the program includes disability and survivors benefits too. Including family member benefits, retirement represents about 70 percent of national Social Security benefits, survivors about 11 percent, and disability about 19 percent.Nationally, about 18.3 percent of the entire United States population, including adults and children of all ages, receive monthly Social Security benefits. 

Of course, retirement is the desired Social Security benefit, but studies show that just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67 and people die at all ages.   

For all of these possibilities, your Social Security Statement is a great family financial planning tool. After creating your my Social Security account, look at your Statement (sample here), especially your earnings record and estimated benefits sections, at least annually. 

Directly from your actual Social Security work record as reported by employers, your earnings record for many years is shown. This is the only place where you can see your personal earnings history. Future Social Security benefits on your record are based on your lifetime earnings. Review your record for accuracy. If there is an error, follow the correction instructions. 

Now look at the estimated benefits section. The Social Security website retirement planning section, contains tools to estimate retirement amounts but disability and survivors estimates, potentially to your children and other family members, are only on your Statement. Useful at all ages and especially for young families with dependent children, these current estimates can be a foundation for your other family financial planning. 

Creating your personal my Social Security account lets you access your Statement whenever desired. Starting for December birthdays, this past September the Social Security Administration resumed periodic mailings of paper Statements. Workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving Social Security benefits and who are not registered for a my Social Security account will receive the Statement in the mail about 3 months before their birthday. After age 60, people will receive a Statement every year. The agency expects to send nearly 48 million Statements each year.

 

 

 

Medicare Part B premiums for 2015

Medicare Part B premiums will remain the same in 2015 as for 2014.  

As announced on October 9th by the Department of Health & Human Services (DHHS), the agency that administers Medicare, the standard 2015 Medicare Part B (Medical) premium remains unchanged from the 2014 amount of $104.90 per month. Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.  

Not everyone pays the standard Medicare Part B (Medical) premium amount. Based on the amount of their Federal tax return modified adjusted gross income (MAGI), some people pay a higher Part B premium. 

Medicare Part B premium information for 2015 is on the Medicare website, www.medicare.gov. 

The detailed DHHS press release about 2015 Medicare Part B premiums is here.

Fast Facts about Social Security

Did you know that 65% of aged beneficiaries received at least half of their income from Social Security in 2012 or that 55% of adult Social Security beneficiaries in 2013 were women?

Fast Facts & Figures About Social Security, 2014 is available online. This annual chartbook highlights data on the most important aspects of the Social Security and Supplemental Security Income programs—the people they serve and the benefits they provide.

From the Preface: 

Fast Facts & Figures answers the most frequently asked questions about the programs administered by the Social Security Administration (SSA). It highlights basic program data for the Social Security (retirement, survivors, and disability) and Supplemental Security Income programs.

The tables and charts illustrate the range of program beneficiaries, from the country’s oldest to its youngest citizens. In all, about 63.2 million people receive some type of benefit or assistance.  

I thought the sections about beneficiary age and sex interesting. Perhaps you will too.

Disability videos on YouTube

When discussing a Social Security retirement topic, I often mention that retirement information and calculators based on your personal work record are in the Retirement Planner section of the Social Security website, www.socialsecurity.gov

The potential for becoming disabled is probably a smaller topic of interest, but just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67. I think acknowledging this possibility should be part of routine financial planning, especially if you have a dependent family.   

You cannot estimate the amount of potential Social Security disability benefits online but can obtain an estimate on your Social Security Statement. That estimate assumes you become disabled now, a good starting point for your financial planning. Your Statement is available online once you register for your free, personal my Social Security account.  

What if you became disabled now due to accident or illness? What do you need to know? How do you file for Social Security disability and how is an application processed? 

Use the Disability Planner section of the website to learn basic information about Social Security disability. There you can file a complete disability application online, and if needed, appeal a decision that you disagree with. 

Especially read the section about how you qualify for disability benefits. Linked from the Disability Planner, you can also watch a Social Security Disability Claims Process video series on YouTube. More questions? Contact Social Security directly.

Social Security & SSI payment dates for 2015

The annual schedule of payment dates for Social Security benefits and the separate Supplemental Security Income (SSI) program has remained a very popular topic ever since I started these posts. 

The 2015 schedule of payment dates is now available for viewing or downloading as a pdf file at http://www.socialsecurity.gov/pubs/EN-05-10031-2015.pdf 

Until 1997, all routine monthly Social Security payments arrived on the same day. No more. Now they arrive on different days of the month. Back then, “check week” was a very hectic time for local Social Security offices and financial organizations, post offices and businesses including grocery stores.  

Multiple payment dates help spread out related workloads. Widespread use of direct deposit (electronic fund transfer) has also greatly reduced the number of payment problems formerly seen with paper checks. 

Most people starting to receive Social Security since 1997 receive their routine benefits on one of four days throughout the month: on the third of the month and on the second, third and fourth Wednesdays of the month. What day will yours arrive? 

With several exceptions, Social Security payment dates now depend on the number holder’s (NH) date of birth. You are the NH if receiving Social Security on your own work record. If receiving based on the work of someone else, that person is the NH.    

Therefore, if you receive Social Security retirement or disability through your own work, the payment date is based on your birth date. A child or spouse receiving benefits on your record will also have a payment date based on your birth date.

A couple can receive Social Security payment on different days if each person is receiving his or her own retirement benefit. 

Social Security benefits are generally paid on the second Wednesday if the number holder was born within the first 10 days of a month, the third Wednesday if born within the 11-20th days and on the fourth Wednesday if born within the 21-31st days.  

Not all Social Security payment dates are birth date based. If you received Social Security before May 1997, your payment date remained the third of the month. People eligible for both Social Security and Supplemental Security Income (SSI) generally receive SSI on the first and their Social Security on the third of the month.  

Supplemental Security Income (SSI) funds are usually paid on the first of a month.  

As noted on the 2015 schedule, regular payment dates for both Social Security and Supplemental Security Income (SSI) are advanced if the usual date falls on a day when financial institutions such as banks or credit unions are closed. 

One more item about payments: routine Social Security retirement, disability and survivors benefits are paid in the following month, meaning the benefit for January arrives in February. Routine Supplemental Security Income (SSI) payments are for the month paid so SSI arriving in February is for February.

 A link to the 2015 calendar has been added to my Areavoices homepage blogroll.

What is the disability waiting period?

Q: What is the disability waiting period? 

A: Social Security disability requirements include a waiting period of five full calendar months before entitlement to benefits can begin. Benefits are paid starting for the sixth full month after the date a disability is determined to begin. 

This date, called the onset, is when the person became disabled and not when the application was submitted or the decision made. 

For example, say someone’s Social Security disability due to illness or injury was established as beginning on September 22, 2014, the onset date. The waiting period would be the five full months of October 2014 – February 2015 with payment effective starting with March. Since Social Security payments are made in the following month, payment for March arrives in April. 

When a person files a disability application and approved near the onset date, he or she has to wait until the waiting period is completed before benefits start. If approved after the waiting period, benefits begin right away. Using the above example, if the person is approved for disability in January 2015, he or she is still in the waiting period and must finish it before benefits start. If the decision is made in May 2015, the waiting period is already completed and benefits can begin immediately. Either way, the waiting period applies. 

In addition to the Social Security disability program, the Social Security Administration is responsible for the very different, low income, Supplemental Security Income (SSI) program. SSI also has disability benefits but does not have a disability waiting period. If eligible for both programs, a person might receive SSI during the Social Security waiting period. Then, when Social Security disability begins after the waiting period, the amount of those benefits will reduce or end the SSI.

 

Agency Resumes Mailing Social Security Statements

Tuesday, September 16, 2014 

News Release

SOCIAL SECURITY ADMINISTRATION

Agency Resumes Mailing Social Security Statements

Encourages People to Create a Secure my Social Security Account to Obtain Their Statement Online, Anytime

Carolyn W. Colvin, Acting Commissioner of Social Security, today announced the agency will resume the periodic mailing of Social Security Statements–once every five years for most workers–while encouraging everyone to create a secure my Social Security account to immediately access their Statement online, anytime. The Statement is a valuable financial planning tool providing workers age 18 and older with important individualized information regarding their earnings, tax contributions, and estimates for future retirement, disability, and survivors benefits.

“We have listened to our customers, advocates, and Congress; and renewing the mailing of the Statement reinforces our commitment to provide the public with an easy, efficient way to obtain an estimate of their future Social Security benefits,” Acting Commissioner Colvin said. “I encourage everyone to create their own secure my Social Security  account to obtain immediate access to their Statement online, anytime.” 

Beginning this month, workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving Social Security benefits and who are not registered for a my Social Security account will receive the Statement in the mail about 3 months before their birthday.  After age 60, people will receive a Statement every year.  The agency expects to send nearly 48 million Statements each year.

The Social Security Statement helps people plan for their financial future.  In addition to providing future benefit estimates, the Statement highlights a person’s complete earnings history, allowing workers to verify the accuracy of their earnings. This is important because an individual’s future benefit amount is determined by the amount of their earnings over their lifetime.  To date, more than 14 million people have established a personalized my Social Security account at www.socialsecurity.gov/myaccount.

With a my Social Securityaccount, people may access the Statement from the comfort of their home, office or library whenever they choose. Individuals who currently receive benefits should sign up for a my Social Security account to manage their benefit payments and, when the need arises, get an instant benefit verification letter, change their address and phone number, and start or change direct deposit of their benefit payment.

Acting Commissioner Colvin reinforced that “whether conducting business with Social Security via the Internet, mail, telephone or face-to-face, we will continue to provide convenient, cost-effective, secure and quality customer service to meet the needs of the public we serve.” 

*****

You can see a sample Social Security Statement here.

 

 

OASDI by zip code for 2013

During July, I posted information detailing Social Security benefits paid by State and County in 2013 (annual publication OASDI Beneficiaries by State and County (2013)). OASDI is Social Security Old-Age (Retirement), Survivors, and Disability Insurance benefits.

Social Security payment information for 2013 is now available by zip code in the publication OASDI Beneficiaries by State and ZIP Code, 2013.

For individual zip codes, information provided includes the number of beneficiaries by type of Social Security benefit, amount of benefits paid, and the number of beneficiaries age 65 or older.

Why SSI ?

Earlier this week, I wrote about the annual SSI Annual Statistical Report, 2013. Supplemental Security Income (SSI) is a national, needs based, federal assistance program administered by the Social Security Administration (SSA) that provides benefits to low income people at age 65 and over, and for blind or disabled children and adults.

Is SSI part of Social Security? 

Supplemental Security Income (SSI) is very different and separate from the Social Security retirement, disability and survivors programs. It is not Social Security even though administered by the Social Security Administration. Depending on office size, SSA employees often work primarily with either SSI or Social Security.

Since the two programs are separate, there are many differences between them with two major ones related to how each is funded and basics of eligibility. U.S. Treasury general revenues fund SSI while Social Security is funded mainly through designated payroll taxes paid by employees and employers. SSI is an assistance program for the aged or disabled with eligibility based on financial need. Social Security provides retirement, survivors and disability benefits based on individual work.

If a person meets the separate program requirements, he or she could receive both Social Security and Supplemental Security. If not, a person might be eligible for just one or neither.

Why is there a SSI program?

The original Social Security Act of 1935 contained more than just the start of Social Security, which is in Title II of the Act. For example, funding for unemployment compensation is in Title III of the Act.   

Other sections of the Act provided federal funding for state run need-based programs of old-age assistance, aid to dependent children and aid to the blind providing the roots for the future SSI program. Despite substantial federal financing, those were essentially state programs. With only broad federal guidelines, each state was responsible for setting its own standards for determining who would receive assistance and how much they would receive. As a result, eligibility requirements and payment levels differed from state to state. Over the years, the State programs became more complex and inconsistent, with as many as 1,350 administrative agencies involved and payments varying more than 300% from State to State. 

Beginning in the early 1960s, this state-operated, federally assisted welfare system drew criticism from within and outside of government for lack of consistency. To reform this, Congress passed and President Richard Nixon approved the Social Security Amendments of 1972, (Public Law 92-603, enacted October 30, 1972), which federalized the programs and created Supplemental Security Income.  

Supplemental Security Income (SSI) provided for a uniform federal income floor of assistance, and optional state programs could supplement that floor. The new program was historic in that it shifted from the states to the federal government the responsibility for determining who would receive assistance and how much assistance they would receive. 

The Social Security Administration was chosen to administer the new SSI program because of its reputation for successful administration of the existing social insurance programs, its existing network of field offices and large-scale data processing and record-keeping operation. At the time, over 3 million people were converted from State welfare programs to SSI. 

The first Supplemental Security Income payments were issued in January 1974. I was there. 

Information for today’s post is primarily from the Social Security website history section and the Background section of the SSI Annual Statistical Report, 2013 

Learn more about SSI and Social Security retirement, survivors and disability benefits at www.socialsecurity.gov. Click on the homepage “Benefits” tab to select a topic.