Monthly Social Security benefits to go up

Published 12:00 am Tuesday, October 30, 2001

Some residents will see their Social Security benefits change soon – for the better.

Tuesday, October 30, 2001

Some residents will see their Social Security benefits change soon – for the better.

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Monthly Social Security and Supplemental Security Income (SSI) benefits to more than 2 million people in Ohio – including more than 15,000 people in Lawrence County – will increase 2.6 percent in 2002, said Bette Backus, manager of the Ironton Social Security office.

They are among 50 million beneficiaries nationwide who will receive the increase.

"This news tells us that inflation continues to be low, which is certainly good news for the elderly and disabled," Mrs. Backus said. "Inflation is one of the biggest challenges for people living on a fixed income."

The 2.6 percent increase will begin with benefits that more than 12,000 Social Security beneficiaries in Lawrence County (45 million nationwide) will receive in January 2002.

Increased payments to more than 3,000 SSI beneficiaries in Lawrence County (6 million nationwide) will begin on Dec. 31.

Mrs. Backus also noted that the 2.6 increase would also mean a 2.6 increase in the amount of cash that beneficiaries in the area would have to spend, an important consideration in today’s economy.

Currently, monthly benefits paid to residents of Ohio amount to $1.5 billion (over $10 million to Lawrence County alone).

For Social Security beneficiaries, the average monthly benefit amount for all retired workers will increase from $852 to $874. The maximum federal SSI monthly payment to an individual will change from $531 to $545. For a couple, the maximum federal SSI payment will increase from $796 to $817.

"The annual cost-of-living adjustment (COLA) is one of the most critically important features of the Social Security program," Mrs. Backus said. "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 2.6 percent.

Based on the increase in the CPI-W from the third quarter of 2000 through the third quarter of 2001, Social Security and SSI beneficiaries will receive a 2.6 percent COLA for 2002.

Some other changes that take affect 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 $84,900 from $80,400 in 2002.

As a result of the increase in the taxable maximum in 2002, the maximum yearly Social Security tax paid by employees and employers will increase by $279 each. For self-employed workers, it will rise by $558. Of the approximately 154 million workers who pay Social Security taxes, only about 10.5 million are affected by the higher wage base in 2002.

Also, based on the increase in average wages, the amount of earnings required to earn a quarter of coverage will increase to $870 in 2002, up from $830 this year.

Information about Medicare changes for 2002 can be found at – the Internet site for the Department of Health and Human Services.