Acting Social Security Commissioner Larry G.
Announces 2.6 Percent Social Security Increase
Monthly Social Security and Supplemental Security Income (SSI)
benefits to more than 50 million Americans will increase 2.6 percent
in 2002, Larry G. Massanari, Acting Commissioner of Social Security
"Today's news tells us that inflation continues to be low
which is certainly good news for the elderly and disabled,"
said Acting Commissioner Massanari. "Inflation is one of the
biggest challenges for people living on a fixed income."
The 2.6 percent increase will begin with benefits that 45 million
Social Security beneficiaries receive in January 2002. Increased
payments to more than 6 million SSI beneficiaries will begin on
For Social Security beneficiaries, the average monthly benefit
amount for all retired workers will rise from $852 to $874. The
maximum federal SSI monthly payment to an individual will rise from
$531 to $545. For a couple, the maximum federal SSI payment will
rise from $796 to $817.
"The annual Cost-of-Living Adjustment (COLA) is one of the most
critically important features of the Social Security program," stated
Acting Commissioner Massanari. "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 2.6 percent. Based on the increase in the CPI-W
from the third quarter of 2000 through the third quarter of 2001,
Social Security and SSI beneficiaries will receive a 2.6 percent
COLA for 2002.
Some other changes that take affect 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 $84,900 from $80,400 in 2002.
As a result of the increase in the taxable maximum in 2002, the
maximum yearly Social Security tax paid by employees and employers
will increase by $279 each. For self-employed workers, it will rise
by $558. Of the approximately 154 million workers who pay Social
Security taxes, only about 10.5 million are affected by the higher
wage base in 2002.
Also based on the increase in average wages, the amount of earnings
required to earn a quarter of coverage will increase to $870 in
2002, up from $830 this year.
Information about Medicare changes for 2002 can be found at www.hhs.gov
– The Internet site for the Department of Health and Human Services.
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