Braille Monitor January 1986
by James Gashel
At the beginning of each year there are several adjustments made in tax rates, exempt earnings amounts, Social Security and SSI benefit levels, and in deductible and co-insurance requirements under Medicare. Here are the facts for 1986:
FICA (Social Security) Tax Rate: The tax rate for employees and their employers during 1986 (effective January 1) is 7.1596. This compares to 7.05% during 1985. Self-employed persons will pay into Social Security at the rate of 14.60% during 1986 as compared to 14.10% during 1985. (Note: During 1986 self- employed persons pay a direct Social Security tax of 12.3%. However, an additional 2.3% is paid to the Social Security trust funds from federal income taxes paid by self-employed persons).
Ceiling on Earnings Subject to Tax: Social Security contributions will be paid during 1986 on the first $42,000 of earnings for employed and self-employed wage earners. This compares to the 19:5 ceiling of $39,600.
Quarters of Coverage: Eligibility for retirement, survivors, and disability insurance benefits is based in large part on the number of quarters of coverage for which an individual is credited. Quarters of coverage are accumulated during periods of work, and anyone may earn up to four quarters during a single year. A quarter of coverage is credited based on earnings. During 1985 a quarter of coverage was credited for earnings of $410 during a calendar quarter. Four quarters of coverage were credited for earnings of S 1.640, even if all of the earnings occurred during one calendar quarter. During 1986, a quarter of coverage requires $440 of earnings, and four quarters requires $1,760 of earnings, no matter when the earnings occur during 1986.
Exempt Earnings: The earnings exemption for blind people receiving Social Security Disability Insurance (SSDI) benefits is the same as the exempt amount for individuals aged 65-69 who receive Social Security retirement benefits. The monthly exempt amount during 1986 is $650. This compares to S610 during 1985. Technically, this exemption is referred to as an amount of earnings which does not show "Substantial Gainful Activity." Earnings above $650 per month for a blind beneficiary of disability insurance during 1986 will show Substantial Gainful Activity if no further deductions permitted by law can be made.
Social Security Benefit Amounts for 1986: All Social Security benefits, including retirement, survivors, disability, and dependence benefits are increased, beginning January 1986, by 3.1% over the amount paid in 1985. The exact dollar increase for any individual will depend upon the amount being paid. Here are some average Social Security benefit amounts payable beginning January, 1986: All retired workers, $478; aged couple, both receiving benefits, $812; widowed mother or father and two children, $1,017; all disabled workers, $483; disabled worker, spouse, and children, $899; worker, reaching age 65 in January 1986, $760; maximum family benefit for above worker $1,330.
SSI Resources Raise: There is an annual raise, effective January 1, 1986, in the amount of resources permitted for SSI recipients. From 1974 through 1984 the limits were $1,500 for individuals and $2,250 for couples. This includes checking accounts, savings accounts, cash value of insurance, stocks and bonds, and similar assets. The 1985 resource limits were $1,600 for individuals and $2,400 for couples. Beginning January, 1986, the resource limit for individuals is increased by $100 (from $1,600 to $1,700), and the resource limit for couples is increased by $150 (from $2,400 to $2,550). Anyone who was previously denied SSI checks on the basis of excess resources should reapply if current resources are within these higher limits.
Standard SSI Benefit Increase: Beginning January, 1986, the federal payment amounts for SSI individuals and couples are as follows: individuals, $336 per month; couples, $504 per month. These amounts are increased from $325 per month and $488 per month paid to individuals and couples during 1985.
Medicare Deductibles: The basic deductible for Medicare Part A (hospital insurance) was $400 during 1985. During 1986 the basic Part A deductible is $492. This is the amount which an individual Medicare beneficiary must pay before Medicare's hospital insurance coverage takes effect during 1986.
Also, the Part A coinsurance amount for hospital treatment from the 61st day to the 90th day becomes $123 during 1986, up from $100 during 1985.
The Medicare Part B (medical insurance) deductible for 1986 remains at the annual $75 amount, just as it was during 1985. The medical insurance premium which Medicare charges for Part B coverage also remains at $15.50 during 1986.