Beneficiaries to see 1.5 percent cost-of-living increase in 2014Published 7:08pm Thursday, November 7, 2013
Approximately 63 million Americans that receive Social Security (SS) and Supplemental Security Income (SSI) benefits will see a slight increase soon.
The Social Security Administration made the announcement on Tuesday that a 1.5 percent cost-of-living adjustment (COLA) will be applied to benefits for 2014. Last year, the SSA applied a 1.7 percent COLA for all beneficiaries.
Frank Viera, deputy regional communications director for the SSA, said that the administration obtains data from the Bureau of Labor Statistics in order to determine whether a COLA needs to be applied.
“The COLA is based on the consumer price index from the third quarter of the previous year to the third quarter of this year,” Viera said. “If we see there is an increase, we apply that increase to social security beneficiaries.”
The some 57 million SS beneficiaries will see the increase starting in January of 2014, Viera said. Those currently receiving SSI – which is an estimated 8 million Americans – will notice increased payments starting Dec. 31, 2013.
Viera said beneficiaries do not need to take any action in order to see the increase in their benefits.
“It is automatic, but they will be receiving a notice soon letting them know how much the increase will be,” Viera said.
SSA will also be increasing the maximum amount of earnings that are subject to Social Security taxes (taxable maximum).
“You pay Social Security tax based on earnings,” Viera said. “This year, if you earned more than $113,700, you wouldn’t pay Social Security taxes on those earnings.”
In 2014, the taxable maximum will increase from $113,700 to $117,000.
The taxable maximum increase is expected to affect about 10 million of the 165 million workers that pay Social Security taxes.