Newsbytes
December 2004
Social
Security Announces 2.7 Percent Benefit Increase
for 2005
From
the Social Security Administration Website
Social
Security and Supplemental Security Income benefits
increase automatically each year based on the rise
in the Bureau of Labor Statistics' Consumer Price
Index for Urban Wage Earners and Clerical Workers
(CPI-W), from the third quarter of the prior year
to the corresponding period of the current year.
This year's increase in the CPI-W was 2.7 percent.
The
2.7 percent Cost-of-Living Adjustment (COLA) will
begin with benefits that more than 47 million Social
Security beneficiaries receive in January 2005.
Increased payments to 7 million Supplemental Security
Income beneficiaries will begin on December 30.
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 $90,000 from $87,900. Of the estimated
159 million workers who will pay Social Security
taxes in 2005, about 9.9 million will pay higher
taxes as a result of the increase in the taxable
maximum in 2005.
It
is important to note that no one's Social Security
benefit will decrease as a result of the 2005 Medicare
Part B premium increase, announced last month. By
law, the Part B premium increase cannot be larger
than a beneficiary's COLA increase. Information
about Medicare changes for 2005 can be found at
www.hhs.gov – The Internet site for the Department
of Health and Human Services.
