The Social Security Administration (SSA) has announced some modifications in the SSI payment that will change everything for this year. As the SSA confirmed, the basic SSI payment for unmarried individuals who simultaneously receive another Social Security benefit will increase to $943 compared to the $914 monthly payment in 2023.
In addition, the average monthly SSI payment for couples will increase to $1,415 from $1,371 in the previous year. Besides modifications in the SSI payment, the Social Security Administration (SSA) will also make some other key changes in 2024. Here are the most important differences that Social Security beneficiaries should be aware of:
- Cost of living adjustment (COLA) increase: To keep up with inflation, Social Security benefits were increased by 3.2% under the Cost-of-Living Adjustment (COLA).
- Maximum monthly benefit: The maximum monthly pension for those who attain full retirement age (FRA) was raised from $3,627 in 2023 to $3,822.
- Earnings limit for early claimants: Beneficiaries who claim Social Security benefits before reaching FRA now have a higher earnings cap. This implies that their ability to earn more will not affect their benefits.
- Increased taxable earnings: The maximum income due to Social Security payroll taxes has risen to $168,600 from $160,200 in 2023.
- SSDI benefits and income thresholds increased: SSDI will grow by 3.2% in 2024, benefiting 8.9 million US people, with monthly payments reaching $1,537 for non-blind workers and $2,590 for blind workers.
- The credit earning threshold went up: To be eligible for Social Security payments if you were born in 1929 or later, you must accumulate at least 40 credits over your working life (a maximum of four credits annually). Every year, the amount required to obtain a single credit increases marginally. Earnings per credit will need to reach $1,730 in 2024, an increase of $90 from 2023.
Changes in the SSI payment are significant but COLA’s increase is key
The cost-of-living adjustment (COLA) is typically the one that gets the most attention, although other adjustments also have an equal influence on beneficiaries’ pockets. Indeed, the change that has the biggest impact on the SSI payment is the COLA.
The cost of living adjustment (COLA) will be 3.2% in 2024, a significant decrease from the 8.7% awarded in 2023. Nevertheless, the growth is higher than the 2.4% average for the previous 20 years. This is due to a decline in overall inflation but a rise in the cost of necessities like food, drink, and medications.
Therefore, President Joe Biden is suggesting a modification to the index that determines the COLA. The SSA currently uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate annual increases; however, this may change to utilize the Consumer Price Index for the Elderly (CPI-E).
Lawmakers studying the cost of living adjustment (COLA)
It is no secret that Social Security is fraught with problems, and one of the most pressing is cost-of-living adjustments (COLA). As a result, Washington lawmakers are proposing to raise benefits by changing the yearly COLA calculation. COLAs are intended to safeguard against inflation and retain benefit purchasing power, but experts and lawmakers contend that they are frequently too low.
Rising expenses have hit retirees, with 58% expecting a considerable spending reduction owing to inflation. Since 2000, Social Security payments have lost about 36% of their purchasing power, and 80% of retired workers say Congress should do more to keep benefit payments consistent with inflation. A group of lawmakers proposed legislation to remedy this issue by modifying the method by which COLA is computed.
As Social Security recipients are often elderly retirees with varying spending habits, legislators in Washington believe COLAs should be linked to the Consumer Price Index for the Elderly (CPI-E), which tracks the spending habits of those aged 62 and up and gives more weight to major expenditures such as housing and healthcare.