With the arrival of 2018, there are many big changes to keep in mind for those approaching retirement age. The tax code has changed, the estate tax threshold has doubled, and there are even new Social Security rules.
Social Security has two components: benefits for retirees and benefits for people who are disabled and unable to work. Since Social Security is a major source of monthly retirement income for most senior North Carolinians, it is important to understand what to expect in 2018. Here is what is new for Social Security benefits.
#1 Cost of Living Raise
The change that most people will notice is the payment amount. For those concerned about Social Security cuts, there is some good news. Benefits are going up for just about all retirees and disabled beneficiaries this year.
Each year, Congress must determine whether to allow the Social Security Administration (SSA) to increase payments for existing recipients to keep up with inflation. These increases are called cost of living adjustments or COLAs. Unfortunately for beneficiaries, SSA does not increase payments every year, especially during periods when there is no inflation.
This year, beneficiaries will see a 2.0 percent increase in their monthly checks. The Medicare Part B premiums, which are deducted from Social Security recipients’ monthly checks, also are increasing, so Social Security recipients may not notice much increase in the checks.
Here is what the percentage increases looked like over the last 10 years:
- 2008 — 2.3%
- 2009 — 5.8%
- 2010 — 0.0%
- 2011 — 0.0%
- 2012 — 3.6%
- 2013 — 1.7%
- 2014 — 1.5%
- 2015 — 1.7%
- 2016 — 0.0%
- 2017 — 0.3%
- 2018 — 2.0%
#2 Tax Caps Raised
When you look at your pay stubs, you will notice that there are several kinds of tax that most people pay. There are federal and state income taxes, and there are FICA taxes. FICA represents Social Security and Medicare. This tax is capped so that you only pay on it up to a point. In 2017, workers paid 6.2% in Social Security taxes on the first $127,200 of income. In 2018, the cap goes up to $128,700.
#3 You Can Earn More While Drawing Social Security
Many people want to keep working to earn extra income to supplement their Social Security checks. Generally, if you start drawing Social Security benefits before full retirement age and continue working, you may be penalized if you earn more than a certain amount of income.
In 2018, you can earn up to $1,420 per month ($17,040 per year) without having a portion or all of your benefits withheld. That is $120 more per year than in 2017. While a small difference, this can definitely be helpful to retirees on a fixed budget. Check out your retirement age.
#4 Retirement Income Goes Up Too
In 2018, retirees will see a 3.7% jump in the maximum benefit available. Last year, the maximum monthly benefit paid to retired workers was $2,687. In 2018, the max is $2,788.
#5 SSA Went Green
The Social Security Administration has finally caught up with the times by going green. To be clear, new Social Security rules now allow electronic statements. SSA has announced that beginning in 2018, beneficiaries can receive electronic statements to allow beneficiaries 24/7 access to their accounts.
The Department of Veterans Affairs (VA) and a number of other major government agencies have had online portals and patient accounts available for years. This change is expected to save millions of dollars in postage and paper costs.
#6 Small Increases for Disability Benefits
This year, there will also be some Social Security disability changes. Disability payments increase to $1,180 a month. Blind beneficiaries will receive $1,970 a month. This amounts to a $20 increase for blind beneficiaries and $10 for all others.
Qualifying for Social Security Disability Benefits
If you are permanently disabled or suffer from a chronic medical or psychological condition that makes it impossible for you to work, then you may be eligible for Social Security benefits through one of two programs. Social Security Disability Insurance is a program that offers financial support to those with qualifying disabilities who have worked enough years to be eligible for disability benefits. Decisions about benefits eligibility are made based on your age, work history and the nature of your medically diagnosed disability.
Supplemental Security Income is a program for the elderly, blind, or disabled who have little to no other income. It may be an option for those who have not worked and paid into the Social Security system long enough to qualify for SSDI benefits.
Denied Disability Benefits
Millions of people with diagnosed disabilities apply for benefits each year, and most are denied. As of 2014, the ADA Participatory Action Research Consortium (ADA-PARC) reviewed all 50 states and reported the percentage of citizens receiving disability payments in each state.
North Carolina has one of the higher ratios of disability recipients in the country with 5.7% of the state’s population receiving Social Security disability benefits. Alaska and Hawaii are at the lowest with just 2.8% of each population. West Virginia had the highest percentage, with 8.9% of its population receiving SSDI.
Disability appeals can take a long time, but the rewards for a family in need are well worth the effort.
Hiring a North Carolina Disability Lawyer
Our North Carolina Social Security disability lawyers at Hardison & Cochran want to help if you have been denied disability benefits. Our knowledgeable attorneys can guide you through the application and appeals process. Research has shown that those who hire lawyers to assist with their SSDI appeals generally have a higher chance of success.
An experienced SSDI attorney can meet with you and carefully review your medical history, employment record, and the unique facts of your case to determine if SSDI or SSI may be a viable option. If you were unfairly denied benefits, we may be able to gather additional medical evidence or employment records and help appeal your denial. To get started, contact us today.