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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal>Social Security Announces 8.7 Percent Cost-of-Living Adjustment for 2023<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>by NFB Advocacy and Policy Department<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>It’s that time of year again when we provide you with information regarding annual adjustments to the Social Security Disability Insurance (SSDI) and Supplemental<o:p></o:p></p><p class=MsoNormal>Security Income (SSI) programs. In 2023, approximately seventy million Americans will see an 8.7 percent cost-of-living adjustment (COLA) increase in their<o:p></o:p></p><p class=MsoNormal>benefit amounts. Thus, come January, monthly checks will be higher.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The 2023 amounts are below, along with some general concepts pertaining to the Social Security and Medicare programs, in case you want to better understand<o:p></o:p></p><p class=MsoNormal>or refresh yourself about your rights. The COLA (if any) is based on the consumer price index (CPI-W), which measures the rate of inflation against the<o:p></o:p></p><p class=MsoNormal>wages earned by the approximately 173 million workers across the nation over the previous four quarters starting with the third quarter of the previous<o:p></o:p></p><p class=MsoNormal>year.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Tax Rates<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>FICA and Self-Employment Tax Rates: If you are employed, you know that you do not bring home everything you earn. For example, 7.65 percent of your pay<o:p></o:p></p><p class=MsoNormal>is deducted to cover your contribution to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Funds and the Medicare Hospital Insurance (HI)<o:p></o:p></p><p class=MsoNormal>Trust Funds, 6.20 percent covers OASDI, and 1.45 percent is contributed to the HI Trust Funds. Additionally, your employer is required to match this 7.65<o:p></o:p></p><p class=MsoNormal>percent for a total of 15.30 percent. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>For those who are self-employed, there is no “employer” to match the 7.65 percent, which means a self-employed individual pays the entire 15.30 percent<o:p></o:p></p><p class=MsoNormal>of their income. These numbers will not change in 2023 regardless of whether an individual is employed or self-employed. As of January 2023, individuals<o:p></o:p></p><p class=MsoNormal>with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes; this does not include<o:p></o:p></p><p class=MsoNormal>the above amounts.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Maximum Taxable Earnings<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>There is a ceiling on taxable earnings for the OASDI Trust Fund, which was $147,000 in 2022 and will increase to $160,200 in 2023. Thus, for earnings above<o:p></o:p></p><p class=MsoNormal>$160,200, there is no 6.20 percent deducted for OASDI. As for Medicare, there is no limit on taxable earnings for the HI Trust Fund.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Social Security Disability Insurance (SSDI) Quarters of Coverage<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The OASDI Trust Fund is kind of like an insurance policy. You have to pay a premium to participate. Therefore, to qualify for Retirement, Survivors, or<o:p></o:p></p><p class=MsoNormal>Disability Insurance benefits, an individual must pay a minimum amount of FICA taxes into the OASDI Trust Fund by earning a sufficient number of calendar<o:p></o:p></p><p class=MsoNormal>quarters to become fully insured for Social Security benefits.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>In 2022, credit for one quarter of coverage was awarded for any individual who earned at least $1,510 during the year, which means that an individual would<o:p></o:p></p><p class=MsoNormal>need to earn at least $6,040 to be credited with four quarters of coverage. In 2023, the amount increases to $1,640 for one calendar quarter or $6,560<o:p></o:p></p><p class=MsoNormal>to earn four quarters of coverage for the year.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>A maximum of four quarters can be awarded for any calendar year, and it makes no difference when the income is earned during that year. Basically, the<o:p></o:p></p><p class=MsoNormal>taxes you pay into the OASDI and HI Trust Funds are your premiums to take part in the Social Security and Medicare programs. The total number of quarters<o:p></o:p></p><p class=MsoNormal>required to be eligible for benefits depends on the individual’s age. The older the individual, the more quarters are required. Furthermore, a higher average<o:p></o:p></p><p class=MsoNormal>income during an individual’s lifetime means a higher Social Security or SSDI check when benefits start. Remember the above quoted numbers for quarters<o:p></o:p></p><p class=MsoNormal>of coverage to become fully insured are only minimum amounts. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Trial Work Period (TWP)<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>This concept is often misunderstood. The amount of earnings required to use a trial work month is not based on the earnings limit for blind beneficiaries<o:p></o:p></p><p class=MsoNormal>but instead on the national average wage index. In 2022, the amount required to use a TWP month was only $970, and this amount will increase to $1,050<o:p></o:p></p><p class=MsoNormal>in 2023. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>If you are self-employed, you can also use a trial work month if you work more than eighty hours in your business, and this limitation will not change<o:p></o:p></p><p class=MsoNormal>unless expressly adjusted.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Substantial Gainful Activity (SGA)<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The earnings limit for a blind beneficiary in 2022 was $2,260 per month and will increase to $2,460 in 2023. Again, it’s important to remember this is<o:p></o:p></p><p class=MsoNormal>not the amount of money an individual makes to use a trial month. This is to say that the TWP can be exhausted even if your income is well below $2,460<o:p></o:p></p><p class=MsoNormal>per month. See the above information about the TWP.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>In 2023 a blind SSDI beneficiary who earns $2,460 or more in a month (before taxes but after subtracting un-incurred business expenses for the self-employed,<o:p></o:p></p><p class=MsoNormal>subsidized income for the employed, and impairment-related work expenses) will be deemed to have exceeded SGA and will likely no longer be eligible for<o:p></o:p></p><p class=MsoNormal>SSDI benefits.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Supplemental Security Income (SSI)<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The federal payment amount for individuals receiving SSI was $841 in 2022 and will increase to $914 in 2023. For married couples, the federal monthly payment<o:p></o:p></p><p class=MsoNormal>amount of SSI will increase from $1,261 to $1,371.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Student Earned Income Exclusion<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>In 2022, the monthly amount was $2,041 and will increase to $2,220 in 2023. The annual amount was $8,231 in 2022 and will be $8,950 in 2023. The asset<o:p></o:p></p><p class=MsoNormal>limits under the SSI program will remain unchanged at $2,000 per individual and $3,000 per married couple.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>ABLE Act<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Signed on December 19, 2014, the ABLE Act has a significant impact on resource limits associated with the SSI and Medicaid programs for those who were<o:p></o:p></p><p class=MsoNormal>blind or disabled by the age of twenty-six. Traditionally, SSI beneficiaries have been required to adhere to strict resource limits: such as a maximum<o:p></o:p></p><p class=MsoNormal>of $2,000 in the bank for an individual receiving SSI benefits. Under the ABLE Act, however, the amount deposited in an ABLE Account can be much higher.<o:p></o:p></p><p class=MsoNormal>ABLE Account contributions must be designated specifically for purposes such as education, housing (with a cautionary warning to follow), employment training<o:p></o:p></p><p class=MsoNormal>and support, assistive technology, health, prevention and wellness, financial management, legal fees, and funeral and burial expenses. The required implementing<o:p></o:p></p><p class=MsoNormal>regulations are being enacted in most states. Check with your financial institution of choice for a status of ABLE Act regulations in a specific state<o:p></o:p></p><p class=MsoNormal>and to see if an ABLE account is right for you.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>As to the warning about ABLE Account contributions for housing, it is important to note that SSI beneficiaries may still face the traditional $2,000 resource<o:p></o:p></p><p class=MsoNormal>limit for ABLE Account funds designated for housing. Thus, SSI beneficiaries should consider the many other purposes not subject to the traditional resource<o:p></o:p></p><p class=MsoNormal>limits when making ABLE Account contributions, since there are also tax advantages associated with ABLE accounts.<o:p></o:p></p></div></body></html>