Social Security Announces 5.8 Percent Benefit Hike for ’09

WASHINGTON, D.C. — Monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8 percent in 2009, the Social Security Administration announced on Thursday, Oct. 16. The 5.8 percent increase is the largest since 1982, according to a release.
Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics’ 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 5.8 percent.
The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on Dec. 31.
Some other changes that take effect 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 $106,800 from $102,000.
Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum.
Information about Medicare changes for 2009 can be found at www.medicare.gov.