Social Security Benefits Up Again
Update From CCH INCORPORATED
SOCIAL SECURITY BENEFITS UP AGAIN IN 2000
(RIVERWOODS, ILL., October 20, 1999) – Social Security beneficiaries will see a larger annual increase in their benefits next year than they have in recent years, according to CCH INCORPORATED (CCH), a leading provider of pension, benefits and tax law information and software. As a result of inflation, the annual increase will be 2.4 percent according to Avram Sacks, JD, CCH Social Security analyst, based on cost-of-living figures released by the Labor Department and the Social Security Administration. It will be applied first to December 1999 benefits, which are paid in January 2000.
The cost-of-living adjustment (COLA) for 2000 compares with a 1.3 percent increase in benefits received in 1999 and a 2.1 percent increase received in 1998. Last year’s increase was the lowest since automatic COLAs became effective in 1975 and matched the increase calculated in 1986 that applied to benefits paid in 1987. The highest increase was 14.3 percent, calculated in 1980 and applied to benefits paid in the last half of that year.
“Although the low inflation rates of recent years have been beneficial overall to people living on Social Security, low cost-of-living adjustments are an obvious consequence of low inflation,” Sacks said.
Sacks noted that the 2.4 percent increase will produce an estimated monthly benefit of $804 for all retired workers in 2000, an increase of $19 a month over 1999. A typical married couple, both receiving benefits, can expect to find $1,348 in their monthly benefit checks in 2000, $32 more than their 1999 monthly benefit.
The COLA is applied to several types of benefits: retirement, disability and survivors, and to the family maximum benefit – the maximum that can be paid if more than one family member is receiving benefits based on one wage earner’s account.
It also affects what are known as transitional benefits – a special calculation applicable to those who reach ages 79 to 83 in 2000 – and to “special age 72” benefits. These are limited benefits paid to certain aged workers and their spouses (or surviving spouses) in cases where the worker is not credited with enough quarters of coverage to qualify as fully insured under the Social Security laws.
Earnings Limits Also Rise
The amounts that certain Social Security beneficiaries can earn without having their benefits reduced – “Earnings Test Exempt Amounts” in Social Security terminology – also will go up next year.
Beneficiaries who are 65 through 69 years old will be able to earn up to $17,000 in 2000, or $1,417 per month, without having their benefits trimmed. This is an increase of $1,500 over the 1999 annual limit of $15,500. Exempt amounts for this age group have been set by statute for future years up until 2002, when the exempt amount will be $30,000.
People under age 65 who are receiving benefits can earn up to $10,080 in 2000, or $840 per month, without having their benefits reduced. This is an inflation-adjusted increase of $480 a year over the 1999 limit.
Beneficiaries age 70 and older are not subject to benefit reductions based on earnings.
About CCH INCORPORATED
CCH INCORPORATED, Riverwoods, Ill., is a leading provider of social security, pension and benefits law information for human resources professionals, including the Social Security Reporter, Unemployment Insurance Reports, Payroll Management Guide, Pension Plan Guide and Employee Benefits Management. CCH also provides tax and business law information in print and electronic form for accounting, legal and health care professionals. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site can be accessed at www.cch.com.
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