- The Washington Times - Wednesday, October 18, 2006

ASSOCIATED PRESS

Social Security checks for nearly 49 million Americans are going up by 3.3 percent next year, which will mean an extra $33 per month in the average check, the government announced yesterday.

The cost-of-living adjustment (COLA) means that the monthly benefit for the typical retired worker will go from $1,011 to $1,044 next year.

The adjustment announced yesterday by the Social Security Administration will go to more than 53 million people. Nearly 49 million receive Social Security benefits and the rest receive Supplemental Security Income (SSI) payments aimed at the poor.

The 3.3 percent increase compares with a 4.1 percent rise in monthly benefits for 2006, which had been the biggest increase in 15 years.

Starting in 1975, the benefit payments have been adjusted each year to keep up with inflation.

The COLA amount is based on the rise in the Consumer Price Index in the July-to-September quarter of this year compared with the same quarter in 2005.

The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,658 to $1,713.

The standard SSI payment will go from $603 per month for a person to $623 and from $904 to $934 for a couple.

The average monthly check for a disabled worker will go from $947 to $979.

The government also announced yesterday that 11 million taxpayers will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $94,200 to $97,500. In all, an estimated 163 million workers will pay Social Security taxes next year.

The $33 average monthly increase for Social Security retirees in 2007 compares with a $39 rise for 2006.

However, much of the 2006 gain was eaten up by a $10.30 monthly increase in the payments retirees had to make for Medicare Part B insurance that covers their doctor visits and outpatient hospital care. This year, that premium increase is $5, driving the total premium to $93.50.

The wealthiest Medicare recipients will see much larger increases as part of changes to the law enacted in 2003 when the drug care benefit was adopted. The higher payments will apply to about 1.5 million beneficiaries with incomes of more than $80,000 annually.

Analysts said the less wealthy seniors are still getting a break compared with last year.

“Seniors should be helped by the drop in energy costs, which will make their heating bills more tolerable, and the lower increase in health premiums,” said David A. Wyss, chief economist at Standard & Poor’s in New York.

Advocates for the elderly said the COLA was a critical safety net for the nearly one-third of retirees who rely on Social Security for 90 percent or more of their income.

“The COLA is more than helpful. It is crucial,” said David Certner, legislative policy director for AARP, which represents people 50 or older. “Without the COLA, you would see the purchasing power of retirees cut in half in a 15-year time period.”


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