A lot of Americans who are retired, widowed, or disabled depend on Social Security benefits as their main source of income. Recent news from the Social Security Administration says that social security recipients should be aware of some big changes coming up in the New Year.
If you get Supplemental Security Income (SSI) or Retirement, Survivor, and Disability Insurance (RSDI), find out more about the changes that are coming and how they will affect your payments next year.
Changes beneficiaries should be aware of and how will they impact their Social Security benefits
Social Security benefits will increase in the US
The SSA handles benefits that get bigger every year because of the cost-of-living adjustment (COLA). This is done to make sure that payments keep up with inflation and the rising cost of living. The new cost of living adjustment (COLA) increase for the next year will be 2.5%, the Bureau of Labor Statistics said on October 10th.
This means that everyone who gets Social Security will get this extra money in their January paychecks. People who get Supplemental Security Income (SSI) will get their first adjusted Social Security benefits in December 2024. People who do not get SSI will get their first adjusted Social Security benefits in January 2025.
Mary Johnson is an independent expert on Social Security and Medicare policy. She thinks that a person who gets $1,870 a month from SSA may see an increase of about $46.80 in their monthly payment next year because of the 2.5 percent increase.
In a statement to Newsweek, she said that the 2025 COLA will be the lowest amount of money that Social Security recipients have received since 2021.
At the same time, the costs of things like food, housing, auto insurance, and all kinds of repairs and maintenance keep going up. A normal COLA would be 2.5%, even though that was the lowest level since 2021.
A new taxable earnings threshold to become effective in January
All American workers pay federal taxes that pay for Social Security benefits. Employers also contribute 6.2% of their workers’ pay. The annual limit on taxable income changes every year. The highest amount of income that is taxed will go up from $168,000 in 2024 to $176,100 in 2025.
A new bill could change Social Security benefits as we know them
As it moves through the legislative process, the Social Security Fairness Act may become law sooner rather than later. There would be no more of the Government Pension Offset (GPO) or the Windfall Elimination Provision (WEP) if the Social Security Fairness Act became law. By law, the WEP cuts Social Security benefits for people who get pensions from jobs in the public sector that did not require Social Security payroll taxes to be paid, like state and federal employees.
This deduction applies even if the person is already getting benefits from Social Security and has paid into it through other jobs. This clause affects more than 2 million people right now.
If a retired federal, state, or local government worker did not pay payroll taxes into Social Security, their spousal or surviving benefits were cut by the GPO. This rule deals with about 800,000 retirees.
The bill had a lot of support in the U.S. House of Representatives, but it is not clear if the Senate will feel the same way. New York Democrat and majority leader Chuck Schumer says the bill will be brought to the floor. He has asked Republicans to support it.
SSA customer service to introduce new changes
SSA’s service standards have gotten better over the past year. However, this could change if a funding request from the Biden administration is turned down again in 2025.
Congress did not give the government agency more money in its September continuing resolution (CR), so in November, the SSA had to stop hiring new people. The government will not shut down because of these resolutions, which keep spending the same until lawmakers agree on a full-year budget plan.
But in September, House Republicans vetoed the Biden administration’s request to raise the SSA’s annual spending from $14.2 billion to $15.4 billion in 2024, which was in line with the administration’s plan for fiscal year 2025.
Another bill for short-term funding is due on December 20, so it is not clear if this plan to keep the agency open until March 2025 will be approved. But if the money is not found, the SSA might not be able to help people right away.
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