SSA Announces 1.7 Percent COLA for 2013The Social Security Administration (SSA) has announced that the nearly 62 million Americans who are currently receiving Social Security and Supplemental Security Income (SSI) can expect their benefits to increase by 1.7 percent beginning in 2013 through a cost of living adjustment or COLA.
The cost of living adjustments or COLA will begin in January of 2013 for the 56 million Social Security beneficiaries and in December 31, 2012 for the more than 8 million Supplemental Security Income beneficiaries.
The SSA also has announced that there will be Medicare changes that will also be implemented in 2013, and for some claimants the Social Security increase may be completely or partially offset by increases in Medicare premiums. The SSA suggests that if you have questions that you can review information at www.Medicare.gov.
What is a cost of living adjustment?
The Social Security Administration recognizes with the rising cost of living that a recipients purchasing power is eroded by inflation. The SSA has implemented the COLA to ensure that purchasing power is not substantially reduced. The COLA is based, according to the SSA, on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.
This calculation is made by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.
Cost of living adjustments are not guaranteed. If there is no increase in the CPI, the SSA does not approve a COLA.
The COLA provisions were first implemented under the 1972 Social Security Amendments and were made automatic in 1975. Prior to 1972 benefits could only be changed through congressional legislation.
How will the COLA affect my SSI payment?
If you are receiving Supplemental Security Income the maximum you are paid is based on the Federal Benefit Rate (FBR). Your SSI payment will be increased by 1.7 percent beginning in January of 2013.
According to the SSA, if you are receiving $698 in 2012, the monthly maximum Federal amounts for 2013 will increase to $710 for an eligible individual, $1,066 for an eligible individual with an eligible spouse, and $356 for an essential person.
Keep in mind if you are receiving more than the Federal Benefit Rate this means that your state is adding a state supplemental payment to your rate. This amount can change if you move to a state that does not offer a state supplemental payment.
If you are getting less than the FBR rate than something is lowering you payment such as the income from a working spouse or your own income. Supplemental Security Income can also be lowered if you are living with someone providing food or shelter for you.
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