, Gloucester, MA

March 14, 2013

Social Security changes you need to know about

Senior Lookout
Anne Springer

---- — As of March 1, recipients can no longer receive their Social Security checks by mail. They must either have direct deposit into a bank or credit union account, or have their benefit transferred to a prepaid Direct Express Debit MasterCard. This may seem difficult for some, but actually this option has been available since 2011 and more than 90 percent of all recipients already had made the transition away from paper checks.

The payroll tax cap has been raised from $110,000 to $113,700, meaning that the first $113,700 of a person’s income is taxed for Social Security, but the remainder isn’t. A recent New York Times article, titled “The War on Entitlements” (, claims that eliminating the cap altogether would actually solve the financial crisis facing the Social Security system, and that many Americans support that, but it doesn’t seem to be on the table at this point.

Most Americans who are still working have noticed that their net pay has shrunk. That’s because the payroll tax cuts were allowed to expire, so workers now resume paying 6.2 percent of their earnings toward Social Security versus the 4.2 percent they were paying while the cuts were in place.

Social Security now allows recipients to transact most business online. Individuals can now apply for benefits online, and beginning early this year, beneficiaries can change their address, get their payment history, and get benefit verification letters online. Probably as the result of offering more services online, Social Security offices around the country have reduced their hours.

One good thing for Social Security recipients who are between ages 62 and 66 is that they are subject to a higher earnings limit. They can earn up to $15,120, after which $1 is withheld for every $2 of income above the earnings limit. Those who turn 66 this year can earn up to $40,480, after which $1 is withheld for every $2 of income they earn above the limit. Of course, those age 66 and older have no earnings limit.

What may seem like good news is a bit of a mixed bag. Social Security recipients received 1.7 percent increase in January 2013. The average benefit, because of this cost of living adjustment (COLA), increased approximately $21 per month. However, the COLA, which many say is based on data that does not include very accurate information on what seniors actually spend on health care, nor does it reflect an inflation price index that includes food or fuel, is under attack as well, as policymakers seek to use changes to so called entitlement programs to reduce the debt. For a more in depth look at the COLA, and what it could mean to you, see this AARP article,

At a time when policies may be undergoing scrutiny or change, it’s important to be well informed and outspoken to family, friends, legislators, and others, especially since among elders who receive benefits, 23 percent of married couples and about 46 percent of unmarried persons rely on Social Security for 90 percent or more of their income. Younger people need to hear the message that we all need to insure the future of Social Security, because it’s for them, too! (About 91 percent of workers age 21 to 64 in covered employment, and their families, have protection in the event of a long-term disability because of Social Security.) Stay informed.

Anne Springer is the public relations director of SeniorCare Inc., Cape Ann’s local area agency on aging. To reach SeniorCare, call 978-281-1750.