NPN benefitsBlog

2007 COLA Bumps Social Security Benefits 3.3 %

SSA announced on Wednesday, October 18 that the Cost-of-Living Adjustment increases for next year will increase Social Security and SSI benefit programs by 3.3 percent. In 2007, the average SSDI monthly check for a worker who is disabled will be $939, up from $902 in 2006. The Federal Benefit Rate (FBR) for Supplemental Security Income (SSI) will rise next year to $623 a month for an individual, from $603, and to $934 for a couple, from $904.

Several work-incentive related provisions are also indexed to the CPI that is the basis for federal COLA adjustments and will rise. The "SGA level" that indicates so-called "substantial work" earnings has been raised to $900 per month. People who are disabled because of blindness have a higher threshold of $1,500 in 2007.

The amount of earned income that indicates a trail-work-period "service month" is up $20 in the coming year to $640. The trial-work- period is 9 "service months" spread over a 5-year period and permits and individual to test their ability to work without losing benefits.

Students with disabilities on SSI will now be able to deduct in significant earns under the Student Earned income Exclusion the first $1,510 up to $6,100 in 2007 when they work. As this work incentive for becomes more robust, it becomes and important ingredient in school-to-work plans for students with disabilities.

Fact sheet is available from SSA

Federal Register Notice/ pdf

© Daniel Scarborough, 2006

Cost of Living Adjustments Raise Social Security Benefits 4.1 %

SSA announced Friday that COLA increases are raising Social Security and SSI benefit programs by 4.1 percent next year. Next year, the average SSDI monthly check for a disabled worker will be $939, up from $902. The Federal Benefit Rate (FBR) for Supplemental Security Income (SSI) will rise next year to $603 a month for an individual, from $579, and to $904 for a couple, from $869.

The Bush Administration is quick to point that this the largest increase since 1991 when the COLA increase was 5.4%. Less forthcoming though is that the COLA increases will be consumed by the increases for Part B premiums (up nearly 42% over the last 2 years) and the complicated Medicare Drug program. The new Medicare drug program will cost about $32 in new premiums staring in January.

© Daniel Scarborough, 2005

Indexing and Social Security

The Center for Retirement Research at Boston College has released a new Just the Facts publication:
“What Does Price Indexing Mean for Social Security Benefits” by Alicia H. Munnell and Mauricio Soto.

A potential component of the administration’s Social Security proposal is to shift from “wage indexing” of benefits to “price indexing.” This change sounds modest, but, in fact, would change the nature of the Social Security program. Price indexing would preserve the purchasing power of Social Security benefits, but these benefits would represent an ever-declining percentage of earnings before retirement.