Social Security Announces 3.5 Percent
Increase
for
2001
See
Details
-
How
it
Effects
You
-
at
bottom
of
story.
Oct.
19,
2000
-
Social Security and Supplemental Security Income (SSI) benefits will increase 3.5 percent in 2001, Kenneth S. Apfel, Commissioner of Social Security announced today.
"Today's news tells us that inflation continues to be low which is certainly good news for everyone living on a fixed income," said Commissioner Apfel. "Inflation is one of the worst enemies of the elderly. The past eight years, which have seen low inflation rates and a strong economy, have been particularly good for the elderly."
The 3.5 percent increase will begin with benefits that Social Security beneficiaries receive in January 2001. Increased payments to SSI recipients will begin on December 29.
For Social Security beneficiaries, the average monthly benefit amount for all retired workers will rise from $816 to $845. The maximum federal SSI monthly payments to an individual will rise from $512 to $530. For a couple, the maximum federal SSI payment will rise from $769 to $796.
"The annual Cost-of-Living Adjustment (COLA) is one of the most critically important features of the Social Security program," stated Commissioner Apfel. "For the elderly, it guarantees that their foundation of retirement income will remain strong for as long as they live."
Social Security and SSI benefits increase automatically each year based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year through the corresponding period of the next. This year's increase in the CPI-W was 3.5 percent. This figure reflects the revision to the CPI released by the Bureau of Labor Statistics on September 28.
Automatic COLAs became effective in 1975.
The maximum amount of earnings subject to the Social Security payroll tax will increase to $80,400 from $76,200. "American workers continue to benefit from our unprecedented economic growth," commented Apfel. "Wages continue to grow faster than inflation. This is good news for American workers."
As a result of the increase in the wage base in 2001, the maximum yearly Social Security tax paid by employees and employers will increase by $260.40 each. For self-employed workers, it will rise by $520.80. About 10.9 million workers are affected by the higher wage base in 2001.
The amount of earnings required to earn a quarter of coverage will increase to $830, up from $780 this year.
Information about Medicare changes for 2001 can be found at http://www.hcfa.gov/ - The Internet site for the Health Care Financing Administration.
2001
SOCIAL
SECURITY
CHANGES
| Cost-of-Living
Adjustment
(COLA): |
| Based
on
the
increase
in
the
Consumer
Price
Index
(CPI-W)
from
the
third
quarter
of
1999
through
the
third
quarter
of
2000,
Social
Security
beneficiaries
and
Supplemental
Security
Income
(SSI)
recipients
will
receive
a
3.5
percent
COLA
for
2001.
Other
important
2001
Social
Security
information
is
as
follows: |
| |
| Tax
Rate: |
2000 |
2001 |
| 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
maximum
taxable
amount
(see
below).
The
Medicare
portion
(HI)
is
1.45%
on
all
earnings. |
| |
| Maximum
Earnings
Taxable: |
2000 |
2001 |
| Social
Security
(OASDI
only) |
$76,200 |
$80,400 |
| Medicare
(HI
only) |
N
o
L
i
m
i
t |
| |
|
|
| |
2000 |
2001 |
| Quarter
of
Coverage: |
$780 |
$830 |
| |
| Retirement
Earnings
Test
Exempt
Amounts: |
| As
of
January
2000,
the
Retirement
Earnings
Test
has
been
eliminated
for
individuals
age
65-69.
It
remains
in
effect
for
those
ages
62
through
64.
A
modified
test
applies
for
the
year
an
individual
reaches
age
65.
(The
Senior
Citizens’
Freedom
To
Work
Act
of
2000,
signed
into
law
by
President
Clinton
on
April
7,
2000.) |
| |
2000 |
2001 |
Year
individual
reaches
65
|
$17,000/yr.
($1,417/mo.) |
$25,000/yr.
($2,084/mo.) |
| NOTE:
Applies
only
to
earnings
for
months
prior
to
attaining
age
65.
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
age
65. |
Under
age
65
|
$10,080/yr.
($840/mo.) |
$10,680/yr.
($890/mo.) |
| NOTE:
One
dollar
in
benefits
will
be
withheld
for
every
$2
in
earnings
above
the
limit. |
| |
| Maximum
Social
Security
Benefit: |
Worker
Retiring
at
Age
65
in
January
of
2000
and
2001 |
| |
$1,433/mo. |
$1,536/mo. |
| |
| SSI
Federal
Payment
Standard: |
2000 |
2001 |
| Individual |
$512/mo. |
$530/mo. |
| Couple |
$769/mo. |
$796/mo. |
| |
| SSI
Resources
Limits: |
2000 |
2001 |
| Individual |
$2,000 |
$2,000 |
| Couple |
$3,000 |
$3,000 |
| |
Estimated
Average
Monthly
Social
Security
Benefits: |
Before
and
After
the
December
2000
COLA: |
| |
Before
3.5%
COLA |
After
3.5%
COLA |
| All
Retired
Workers |
$
816 |
$
845 |
| Aged
Couple,
Both
Receiving
Benefits |
$1,363 |
$1,410 |
| Widowed
Mother
and
Two
Children |
$1,639 |
$1,696 |
| Aged
Widow(er)
Alone |
$
783 |
$
811 |
Disabled
Worker,
Spouse
and
One
or
More
Children |
$1,266 |
$1,310 |
| All
Disabled
Workers |
$
759 |
$
786 |
|
