by Jim McCarthy
Jim McCarthy is a Government Programs Specialist for The National Federation of the Blind.
The New Year brings with it annual adjustments to Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medicare. Changes include new tax rates, higher exempt earnings amounts, and cost of living increases. Here are the facts for 2008.
Social Security Eligibility and Benefit Increases
Eligibility for retirement, survivors, and disability insurance benefits is based in large part on the number of quarters of coverage earned by any individual during periods of work. Anyone may earn up to four quarters of coverage in a single year. In 2008 a Social Security quarter of coverage will be credited for earnings of $1,050 during a calendar quarter. Four quarters can be earned with annual earnings of $4,200.
A cost of living adjustment (COLA) of 2.3 percent will be applied for checks received in January 2008. The precise dollar increase depends on the amount of recipient’s benefit.
FICA and Self-Employment Tax Rates
The FICA tax rate for both employees and their employers continues at 7.65 percent. This tax includes a 6.2 percent contribution to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Fund. Self-employed persons pay both the employee and employer portions of the tax—15.3 percent of workers’ taxable earnings. The taxable amount increased to $102,000 in 2008.
Social Security Disability Insurance for Blind Beneficiaries
Exempt Earnings or “Substantial Gainful Activity”:
In 2008, blind SSDI beneficiaries can have gross earnings of $1,570 or more a month, before taxes, to achieve substantial gainful activity. However, individuals with gross earnings in excess of $1,570 can subtract all unearned (or subsidy) income and impairment-related work expenses from gross earnings.
Medicare for former SSDI Beneficiaries:
Those who become ineligible for SSDI cash benefits can continue to receive Medicare Part A and B for at least 93 months after the end of a trial work period. Then, you may purchase Part A for $423 a month. This is reduced to $233 for individuals who have earned from 30 to 39 months of Social-Security-covered employment.
Supplemental Security Income
Beginning January 2008, the SSI federal payment amounts are $637 a month for individuals and $956 a month for couples.
Student Earned Income Exclusion:
For 2008 students receiving SSI can earn up to $1,550 a month, and $6,240 a year. The SSI program applies strict asset (resource) limits of $2,000 for
individuals and $3,000 for couples.