The Social Security Administration has announced a cost of living adjustment of 1.4% for social security benefits. The increase will begin in January 2003.
"Today's news tells us that inflation continues to be low, which is certainly good news for the elderly and disabled," said Social Security Commissioner Jo Anne B. Barnhart. "Inflation is one of the biggest challenges for people living on a fixed income. The annual Cost-of-Living Adjustment (COLA) ensures that a person's monthly benefit doesn't drop in value over time."
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 the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 1.4 percent.
Additional changes will take place in January based on the increase in average wages. Therefore, in 2003, the level of earnings subject to the Social Security tax will rise from $84,900 to $87,000.
A complete fact sheet showing 2003 Social Security changes is available for viewing.