By Patricia L Johnson
Social Security benefits are being paid to roughly 62 million Americans. The largest portion, 56 million will see the 1.7 percent increase on their January 2013 checks, while the remaining SSI beneficiaries will receive the increase on their December 31, 2012 check.
P.L. 92-336, established automatic increases to Social Security and SSI benefits each year based on the percentage CPI-W [Consumer Price Index for Urban Wage Earners and Clerical Workers] increased from the third quarter of the last year a COLA was determined to the third quarter of the current year. The actual CPI-W percentage is calculated by the Bureau of Labor Statistics. Prior to the signing of P.L. 92-336 Cost of Living Adjustment Allowances were only made when Congress approved an increase.
Good thing we have P.L. 92-336 because the chances of the 112th Congress approving a COLA increase for anyone other than the very wealthy is probably between slim and none. On the other hand, perhaps the vision of 62 million old folks beating on the walls of Congress with their umbrellas, canes and walkers is incentive enough.
It is estimated 163 million workers pay into Social Security. Out of that 163 million, approximately 10 million will pay higher taxes in 2013 as the maximum amount of earnings subject to the Social Security tax will increase from $110,100.00 to $113,700.00.
Social Security and Medicare tax rates are scheduled to stay the same for 2013 as they are for 2012. As indicated on the following Social Security chart, we are operating under a 2% reduction which is scheduled to expire at the end of December 2012.
It is highly unlikely this rate will increase by the 2% for calendar year 2013 due to the extraordinary burden it will place on the middle-class.
As of June 30, 2012 approximately 89 percent of American individuals age 65 and over were receiving Social Security benefits.
At least 40 percent of those receiving Social Security benefits in 2012 rely entirely on their Social Security benefits for survival as they have no other income. Please take that fact into consideration when you vote on November 6.
© 2012 Patricia L Johnson