In the fall, the Social Security Administration (SSA) shares policy adjustments that will occur the following year in the program. This directly affects the VA monthly benefit amounts, as the VA takes into account inflation and higher costs of living.
For the SSA, higher payments were sent out as early as December 31, 2018, but all changes technically began January 1, 2019. Here are the adjustments.
Cost of Living Increase
In January, those who qualify for social security benefits and VA benefits will automatically receive more due to the increased expense of living. This cost of living adjustment (COLA) will increase monthly benefits by 2.8%. The increase will be approximately $39, which works out to $468 per year. How does someone know if they qualify for VA benefits? If honorable military service caused an injury, it’s likely the veteran qualifies.
A Rise in Earnings Limit
The income limit for individuals who have reached retirement age (62 — 67 years old) but are still working and eligible for social security is $17,640, prior to the SSA subtracting $1 when you earn $2. The year that an individual will reach the full age of retirement, the yearly earning maximum is $46,920 prior to the SSA subtracting $1 when you earn $3. This changes in the month of your birthday when you turn the age of full retirement. Individuals with birthdays from 1943 to 1954 can retire at 66. The very soonest that someone can start receiving their benefits is age 62, but they will only receive a percentage of their full amount because they will be receiving it longer.
Tax Cap Expanded
To offer SSA benefits to everyone eligible, adjustments needed to be made to the tax cap. Since social security is funded by employee’s income taxes, the cap on income affected needed to be expanded slightly. Currently, 6.2 of an employee’s paycheck is allocated to SSA benefits. Employers also pay this amount. This percentage will remain the same in 2019. However, there is a limit on how much income can go toward the SSA. Last year, the income limit was $128,400. In 2019, the tax cap will affect those who make up to $132,900. To even this out, the maximum earnings limit is also increased to allow for more income.
Increased Earnings for a Work Credit
In 2019, one work credit (for three months of social security payments) will require $1,360 of earned income. The SSA uses credits to evaluate whether or not someone qualifies to receive benefits. With yearly earnings of more than $5,440, at least four credits will be allotted to an individual’s total income. Typically, 40 credits are required to qualify for benefits.
Beneficiaries Will Receive Increased Supplemental Security Payments
The payment increases $21 every month (for January, it’s $771). SSI provides help to those with disabilities, the blind, and aging who can’t earn much of an income on their own. This program aids with monetary support to be used on shelter, clothing, and food.