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Social Security Announces 2023 COLA Changes to Payroll Tax and Medicare Premiums

Social Security Administration Announces 2023 Cost-of-Living Adjustment

The Social Security Administration recently announced the cost-of-living adjustment (COLA) for 2023. This adjustment will increase the amount of benefits that Social Security recipients will receive.

The COLA notices will be mailed out in December, and online notices will be available in early December through my Social Security account. Social Security is a program that provides retirement, disability, and survivor benefits to qualified individuals.

The amount of benefits that a person receives is based on the person’s earnings history and the age at which they start receiving benefits. COLA is an annual adjustment that is designed to keep pace with inflation.

Therefore, it increases the amount of benefits paid to Social Security recipients. In 2023, the COLA is set to be 5.9%.

This means that most beneficiaries will see a significant increase in their monthly benefit amount. However, those enrolled in Medicare may not see as large of an increase, as Medicare premiums are also expected to increase.

Therefore, the impact of the COLA on the net Social Security benefit will vary from person to person. For those who are wondering what their new benefit amount will be, it is best to wait for the mailed COLA notices or check their online notice through their my Social Security account.

The Social Security Administration advises against contacting the agency for the new benefit amount, as they are unable to provide it before the COLA notice.

Changes to Social Security Payroll Tax and Retirement Earnings Test Exempt Amount in 2023

In addition to the COLA announcement, the Social Security payroll tax and retirement earnings test exempt amount are also set to change in 2023. The maximum amount of earnings subject to the Social Security payroll tax is increasing from $142,800 to $147,000.

This means that people who earn more than $147,000 will not pay Social Security taxes on the excess amounts. For those who earn $147,000 or less, the Social Security payroll tax will still be deducted from their earnings, and their future Social Security benefits will be based on these earnings.

The retirement earnings test exempt amount is also being adjusted. The exempt amount is the amount of earnings that a person can make while receiving Social Security benefits without an offset to their benefit amount.

In 2023, the exempt amount for those who will reach full retirement age (FRA) is increasing from $18,960 to $19,560. This means that those who reach FRA in 2023 can earn up to $19,560 during the year without any reduction in their Social Security benefits.

For those who are younger than their FRA, the exempt amount is lower. If a person is younger than their FRA for the entire year, they can earn up to $19,560 without any reduction in their Social Security benefit amount.

However, for every $2 earned above the exempt amount, $1 will be deducted from their benefit amount. This reduction is in addition to any withholding of Social Security benefits due to earning above the maximum amount for the year.

What Should You Do Now? If you are a Social Security beneficiary, it is important to understand these changes and the impact they may have on your benefits.

For example, if you are approaching FRA in 2023, you may want to adjust your earnings to avoid any reduction in your Social Security benefits. In addition, it is always a good idea to regularly review your Social Security benefits and earnings history to ensure that they are accurate.

You can create a my Social Security account on the official SSA website to view your earnings history and benefits statement.

Final Thoughts

The Social Security Administration’s announcement of the 2023 COLA and changes to the payroll tax and retirement earnings test exempt amount will have important implications for millions of Americans. It is important to understand these changes and how they may impact your benefits.

By staying informed and actively managing your Social Security benefits, you can ensure that you receive the maximum benefits for which you are eligible.

Increase in Attorney Fee Cap for Disability Claims

The Social Security Administration has announced an increase in the attorney fee cap for disability claims. This fee cap is the maximum amount that an attorney can charge for representing a Social Security Disability Insurance or Supplemental Security Income claimant.

The new fee cap for non-court representation will be $7,900, while the fee cap for representation before a court of law will be $11,900. The purpose of this increase is to adjust for the inflation that has occurred since the last time the attorney fee cap was increased.

The new cap represents an increase from the previous fee cap of $6,000 for non-court representation and $9,000 for court representation. Despite the increase, there has been no change in the percentage of the claimant’s award that can be charged as a fee.

The attorney fee cap is an important protection for Social Security claimants, as it ensures that they are not charged excessive fees for legal representation. Social Security claimants are often in a vulnerable position due to their disability or financial hardships, and they need quality legal representation without facing an additional financial burden beyond the cost of the legal representation.

The new fee cap will take effect on January 1, 2022, and will apply to attorney fee agreements between Social Security claimants and their attorneys that are signed on or after that date. The Social Security Administration encourages claimants to speak with their attorneys about the new fee cap and to carefully review any attorney fee agreements before signing them.

Medicare Premiums Going Down in 2023

The Social Security Administration has announced that Medicare premiums will be going down in 2023. This is good news for the millions of Americans who rely on Medicare for their health care needs.

The decrease in premiums was made possible due to the provisions of the American Rescue Plan Act of 2021. Acting Social Security Commissioner Kilolo Kijakazi has stated that the decrease in Medicare premiums is part of the Administration’s commitment to support older Americans and those who rely on Medicare for their health care needs.

The decrease in premiums is an important step in providing affordable health care to all Americans, regardless of their income or financial resources. The specific details of the decrease in Medicare premiums are still being worked out, but it is expected to be a significant reduction.

This reduction will make it easier for older Americans to afford the health care services they need and reduce their financial burden. It is also expected to boost Medicare enrollment and provide better access to health care for everyone.

In addition to the decrease in Medicare premiums, the American Rescue Plan Act of 2021 also included provisions for increasing Medicaid funding, expanding access to vaccines, and providing support for home and community-based care. These provisions are all aimed at making health care more affordable and accessible for all Americans, regardless of their socioeconomic status.

Conclusion

The increase in the attorney fee cap for disability claims and decrease in Medicare premiums are important developments that will impact millions of Americans. By understanding these changes, Americans can better navigate the Social Security and health care systems and make informed decisions about their benefits and health care needs.

The Social Security Administration will continue to work towards providing affordable and accessible benefits to all Americans and supporting those who are most vulnerable. In summary, the recent announcements by the Social Security Administration regarding the increase in attorney fee caps for disability claims, and the decrease in Medicare premiums in 2023, are significant for millions of Americans.

The fee cap increase helps protect Social Security claimants from excessive legal fees, while the Medicare premium decrease supports the health care needs of older Americans and provides better access to health care. It is essential to stay informed about these changes and how they impact your benefits to ensure that you make the best decisions for your financial and health care needs.

Overall, these developments underscore the Social Security Administration’s commitment to providing affordable and accessible benefits to all Americans.

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