Each year, the Social Security Administration (SSA) introduces adjustments to its disability programs, encompassing both automatic, inflation-driven increases and more substantial changes, such as shifts in attorney fee limits.
Understanding these alterations is crucial for those seeking Social Security disability benefits in 2023, as they can impact the benefit structure and the legal representation cost. It’s advisable to stay informed about these changes to navigate the disability application process effectively.
As is customary with Social Security, changes are on the horizon for 2024, bringing a mix of financial adjustments that will impact the lives of many working or retired Americans. While some changes promise an economic boost for individuals, a couple may introduce challenges with the opposite effect.
How Changes To Disability May Affect The Applicants In 2024?
One significant shift on the horizon is the upcoming cost-of-living increase (COLA) set to enhance Social Security payments starting January 2024. However, due to a dip in this year’s inflation rate, the 2024 COLA is expected to be notably less than the substantial 8.7% increment in 2023.
This adjustment is just one of the several alterations awaiting Social Security in 2024, with six key changes outlined below, shedding light on those who stand to be most impacted.
- COLA Increase
- More Income Will Be Taxed
- Maximum Social Security Benefit Will Increase
- Higher Earnings Test
- Spousal and Disability Benefits Will Be Bigger
- Higher SSI Payment Standards
- COLA Increase
In 2024, the COLA is set at 3.2%, marking a significant drop from this year’s adjustment but surpassing the 2.6% average witnessed over the past few decades. The impact of this adjustment will be felt across all Social Security recipients, with varying effects based on factors such as benefit type and claiming timing.
For Social Security retirement beneficiaries, the 3.2% increase translates to an average monthly payment boost of $59. At the same time, individuals with long-term disabilities can expect an average increase of $48 per month, as reported by The Motley Fool.
- More Income Will Be Taxed
In 2024, the maximum earnings subject to the Social Security payroll tax will rise to $168,600, up from $160,200 in 2023. This adjustment primarily affects individuals with higher incomes.
Workers contribute a 7.65% FICA tax from their paychecks, with 6.2% allocated to Social Security. According to Social Security Administration data cited by CNBC, approximately 6% of workers paying Social Security taxes earn above the taxable maximum yearly.
- Maximum Social Security Benefit Will Increase
In 2024, the maximum Social Security benefit for a worker retiring at full retirement age (FRA) will increase to $3,822 from $3,627 in 2023, as reported by CPA Practice Advisor.
This adjustment impacts individuals who claim benefits at FRA, which is either 66 or 67, depending on their birth year. Those who opt for earlier benefit claims will receive smaller monthly payments.
- Higher Earnings Test
If you choose to work after claiming Social Security retirement benefits, you may face an earnings test if your income surpasses a specific threshold. In 2024, the earnings exempt from the retirement earnings test will rise to $22,320 from $21,240 in 2023, as outlined by the SSA.
For every $2 in earnings beyond this limit, $1 in benefits will be withheld. It’s essential to note that these earnings rules cease to apply once you reach full retirement age.
- Spousal and Disability Benefits Will Be Bigger
In 2024, widowed mothers with two children can expect an average increase in benefits to $3,653 per month, up from $3,540 in 2023, as per the SSA. Similarly, aged widows and widowers living alone will experience an average benefit rise to $1,773 per month from $1,718.
For disabled workers with a spouse and one or more children, the average monthly benefit will increase to $2,720 from $2,636.
- Higher SSI Payment Standards
In 2024, individuals receiving Supplemental Security Income (SSI) benefits and Social Security can anticipate an increase in the SSI Federal Payment Standard to $943 monthly, up from $914 in 2023. Similarly, for couples, the standard will rise to $1,415 per month from $1,371.
Need Legal Help With Disability Benefits In 2024? Talk To An Attorney
An experienced Social Security Disability Lawyer can significantly aid in navigating the complex landscape of disability benefits. They can streamline the application process, ensuring all necessary documentation is submitted promptly.
Their understanding of evolving regulations and changes in Social Security policies enhances your chances of success in securing the benefits you deserve.