SSA Announces 2008 COLA

The Social Security Administration has announced that the cost of living adjustment (COLA) for Social Security benefits and for the Supplemental Security Income (SSI) Federal Benefit Rate (FBR) for 2008 will be 2.3 percent. 72 Fed. Reg. 60703 (Oct. 25, 2007). This will raise the SSI FBR from $623 to $637 per month for an individual and from $934 to $956 for an eligible couple. The estimated average monthly individual Social Security retirement benefit will increase from $1,055 per month to $1,079.

Other changes for 2008 include an increase in the earnings required for a quarter of coverage from $1,000 to $1,050 and an increase in the substantial gainful activity (SGA) level from $900 to $940 per month for a disabled person and from $1,500 to $1,570 for a blind individual. Also, earnings in excess of $102,000 per year will be exempt from the Social Security tax compared to the current $97,500 cutoff. These figures are based on the increase in average covered wages rather than the increase in cost of living.

Also, the amount of annual earnings exempt from the retirement earnings test will increase from the current $12,960 to $13,560 for those under full retirement age with one dollar in benefits withheld for every two dollars in earnings over the exempt amount. The exempt amount in the year an individual reaches full retirement age goes from the current $34,440 to $36,120 per year, with one dollar in benefits withheld for every three dollars in earnings above the limit.

Finally, the full retirement age will increase to 66 years in the course of 2008. This will affect workers born in 1943.

For further information, contact Gerald McIntyre in NSCLC's Los Angeles office.