2012 Social Security Changes (Printer friendly version)

Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 through the third quarter of 2011, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 3.6 percent COLA for 2012. Other important 2012 Social Security information is as follows:

Tax Rate:
2011 2012
Employee 7.65%* 7.65%
Self-Employed 15.30%* 15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

* Section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced, for wages and salaries paid in calendar year 2011 and self-employment income in calendar year 2011, the OASDI payroll tax by 2 percentage points, applied to the portion of the tax paid by the worker and the self-employed individual.

Section 101 of the Temporary Payroll Tax Cut Continuation Act of 2011 extends the reduction of the tax rate (see * under NOTE in previous column) through the end of February 2012.  (The reduced tax rate for earnings in 2012 applies only to the first $18,350 of a worker’s total wages and self-employment income. The limit of $18,350 is two-twelfths of the $110,100 taxable earnings limit for 2012.)  Unless additional legislation is approved, the tax rate will then revert to the unreduced rate.
Maximum Taxable Earnings:
2011 2012
Social Security (OASDI only) $106,800 $110,100
Medicare (HI only) N o   L i m i t
Quarter of Coverage:
2011 2012

Earnings needed to earn one Social Security Credit

$1,120 $1,130
Retirement Earnings Test Exempt Amounts:
2011 2012

Under full retirement age

NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.


The year an individual reaches full retirement age

NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.

There is no limit on earnings beginning the month an individual attains full retirement age.

Social Security Disability Thresholds:
2011 2012

Substantial Gainful Activity (SGA)


Trial Work Period (TWP) $720/mo. $720/mo.
Maximum Social Security Benefit: Worker Retiring at Full Retirement Age:
2011 2012
  $2,366/mo. $2,513/mo.
SSI Federal Payment Standard:
2011 2012
Individual $674/mo. $698/mo.
Couple $1,011/mo. $1,048/mo.
SSI Resources Limits:
2011 2012
Individual $2,000 $2,000
Couple $3,000


SSI Student Exclusion:
2011 2012
Monthly limit $1,640 $1,700
Annual limit $6,600 $6,840
Estimated Average Monthly Social Security Benefits Payable in January 2012:
3.6% COLA
3.6% COLA
All Retired Workers $1,186 $1,229
Aged Couple, Both Receiving Benefits $1,925 $1,994
Widowed Mother and Two Children $2,455 $2,543
Aged Widow(er) Alone $1,143 $1,184
Disabled Worker, Spouse and One or More Children $1,826 $1,892
All Disabled Workers $1,072 $1,111