Social Security Commissioner Kenneth S. Apfel
Announces 3.5 Percent Social Security Increase
Social Security and Supplemental Security Income (SSI) benefits will increase 3.5 percent in 2001, Kenneth S. Apfel, Commissioner of Social Security announced today.
"Today's news tells us that inflation continues to be low which is certainly good news for everyone living on a fixed income," said Commissioner Apfel. "Inflation is one of the worst enemies of the elderly. The past eight years, which have seen low inflation rates and a strong economy, have been particularly good for the elderly."
The 3.5 percent increase will begin with benefits that Social Security beneficiaries receive in January 2001. Increased payments to SSI recipients will begin on December 29.
For Social Security beneficiaries, the average monthly benefit amount for all retired workers will rise from $816 to $845. The maximum federal SSI monthly payments to an individual will rise from $512 to $530. For a couple, the maximum federal SSI payment will rise from $769 to $796.
"The annual Cost-of-Living Adjustment (COLA) is one of the most critically important features of the Social Security program," stated Commissioner Apfel. "For the elderly, it guarantees that their foundation of retirement income will remain strong for as long as they live."
Social Security and SSI benefits increase automatically each year based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year through the corresponding period of the next. This year's increase in the
CPI-W was 3.5 percent. This figure reflects the revision to the CPI released by the Bureau of Labor Statistics on September 28.
Automatic COLAs became effective in 1975.
The maximum amount f earnings subject to the Social Security payroll tax will increase to $80,400 from $76,200. "American workers continue to benefit from our unprecedented economic growth," commented Apfel. "Wages continue to grow faster than inflation. This is good news for American workers."
As a result of the increase in the wage base in 2001, the maximum yearly Social Security tax paid by employees and employers will increase by $260.40 each. For self-employed workers, it will rise by $520.80. About 10.9 million workers are affected by the higher wage base in 2001.
The amount of earnings required to earn a quarter of coverage will increase to $830, up from $780 this year.
Information about Medicare changes for 2001 can be found at www.medicare.gov - The Internet site for the Health Care Financing Administration.
NOTE TO CORRESPONDENTS: A fact sheet showing the effect of the various automatic adjustments is available here.
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