The Social Security Administration has implemented a variety of new
rules and features for 2013. The two-year payroll tax cut has officially
ended, and paper Social Security checks will soon cease to be printed. A
growing number of Social Security services will also be online this
year. Here's a look at some of the recent Social Security changes that
go into effect this year:
Payroll tax cut ends. The temporary payroll tax cut
was allowed to expire at the end of 2012. Workers who paid 4.2 percent
of their income into the Social Security system in 2011 and 2012 will
now resume contributing 6.2 percent of their earnings in 2013, up to the
payroll tax cap of $113,700.
Higher payroll tax cap. The payroll tax cap
increased by $3,600, from $110,100 in 2012 to $113,700 in 2013. Workers
who earn more than this threshold don't need to pay Social Security
taxes on that income.
More online services. A trip to the Social Security
office is no longer necessary to start your Social Security payments. A
growing number of retirees are claiming Social Security payments
online, largely thanks to an advertising campaign starring actors Patty
Duke and George Takei. For the first time in 2012, workers could access
their Social Security statements online, including their complete
earnings history and expected payments, and about 3 million people have
already done so. In early 2013, Social Security added online services
including the ability to access a benefit verification letter and
payment history. Retirees can also change their address and start or
change direct-deposit information online. "The ability to do this
online, it will be a real convenience for the people who are required to
have these benefit verification letters," says Social Security
Commissioner Michael Astrue. "It is going to allow us to focus on the
kind of conversations that we really do need to have face to face."
Reduced office hours. Social Security offices are
reducing the hours they are open to the public to save money and avoid
paying overtime to workers. Social Security locations nationwide have
been closing 30 minutes early each day since Nov. 19, 2012, and they
began closing to the public at noon every Wednesday on Jan. 2, 2013.
Paper checks will end. On March 1, 2013, the
Treasury department will stop mailing paper checks to Social Security
recipients. Retirees will be required to choose to have their Social
Security payments either directly deposited into a bank or credit union
account or loaded onto a prepaid Direct Express Debit MasterCard. "If
you already have a bank account or credit union account, we encourage
you and it's our preference that you sign up for direct deposit," says
Walt Henderson, director of the electronic fund transfer strategy
division at the Treasury Department. "The debit card is primarily for
unbanked benefit recipients. We don't want people who already have a
bank account to feel that they have to get the debit card." New Social
Security beneficiaries have been required to choose an electronic
payment option since May 2011, and approximately 93 percent of Social
Security and Supplemental Security Income (SSI) payments are already
being made electronically.
Higher earnings limit. People between ages 62 and
66 who work and collect Social Security benefits at the same time might
have part or all of their Social Security benefit temporarily withheld.
Workers between ages 62 and 65 can earn up to $15,120 in 2013, after
which $1 in benefits will be withheld for every $2 of income above the
earnings limit. People who turn 66 this year can earn up to $40,080, and
then $1 of benefits will be withheld for every $3 earned above the
limit. However, once you turn age 66, the earnings limit no longer
applies. And benefits may be recalculated at age 66 to reflect the
withheld benefits and continued earnings.
Bigger payments. Social Security beneficiaries
began receiving payments that were 1.7 percent larger in January 2013.
The average monthly Social Security benefit in January increased from
$1,240 to $1,261 as a result of the cost-of-living adjustment.
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