Social Security Announces 2.7 Percent Benefit Increase for 2005
Monthly Social Security and Supplemental Security Income benefits for more than 52 million Americans will increase 2.7 percent in 2005, the Social Security Administration announced today.
Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 2.7 percent.
The 2.7 percent Cost-of-Living Adjustment (COLA) will begin with benefits that more than 47 million Social Security beneficiaries receive in January 2005. Increased payments to 7 million Supplemental Security Income beneficiaries will begin on December 30.
Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $90,000 from $87,900. Of the estimated 159 million workers who will pay Social Security taxes in 2005, about 9.9 million will pay higher taxes as a result of the increase in the taxable maximum in 2005.
It is important to note that no one's Social Security benefit will decrease as a result of the 2005 Medicare Part B premium increase, announced last month. By law, the Part B premium increase cannot be larger than a beneficiary's COLA increase. Information about Medicare changes for 2005 can be found at www.hhs.gov – The Internet site for the Department of Health and Human Services.
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NOTE TO CORRESPONDENTS: A fact sheet showing the effect of the various automatic adjustments is attached.
United States and Mexico Sign Social Security Agreement
Jo Anne Barnhart, Commissioner of Social Security, signed an agreement today with Dr. Santiago Levy Algazi, Director General, Mexican Social Security Institute, that will remove from U.S. citizens working for U.S. companies in Mexico the burden of paying social security taxes to both countries. The agreement also will remove the double taxation requirement for Mexican citizens working for Mexican companies in the United States. “This agreement eliminates a serious and unnecessary impediment to American and Mexican businesses and their employees,” Commissioner Barnhart stated. “Just as important, it promotes equity and fairness for workers who divide their careers between our two countries.”
Currently, U.S. companies that employ U.S. citizens in Mexico are required to contribute to both the U.S. and Mexican social security systems. When the agreement takes effect, U.S. and Mexican employers and their employees will contribute to either the U.S. or Mexican social security systems, but not both. This will result in approximately 3,000 U.S. workers and their employers sharing in tax savings of $140 million over the first five years of the agreement.
The agreement also will improve social security protection for people who work in both countries. At present, some workers who have divided their careers between the United States and Mexico fail to qualify for social security benefits from one or both countries because they do not meet minimum eligibility requirements. Under the agreement it will be possible for workers and their family members to qualify for pro-rated U.S. or Mexican benefits based on combined credits from both countries. This will result in approximately 50,000 U.S. and Mexican workers receiving benefits after the first five years of the agreement.
The agreement must be reviewed by the U.S. Congress and approved by the Mexican Senate before it can take effect. The United States has similar social security agreements with 20 other countries, including Australia, Canada, Chile, South Korea and nearly every country in Western Europe. In addition, the U.S. signed a social security agreement with Japan in February 2004, which is expected to take effect in late 2005.
NOTE TO CORRESPONDENTS: A fact sheet providing more information about the Social Security agreement between the U.S. and Mexico is attached. To find out more about agreements with other countries go to http://www.socialsecurity.gov/international/.
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Social Security Recipients Warned About Potential Scams
Jo Anne Barnhart, Commissioner of Social Security and Patrick O’Carroll, Jr., Acting Inspector General of Social Security issued a warning today about a number of scams that have surfaced recently throughout the U.S. They noted that the Agency has received numerous reports about telephone calls or visits from people alleging to be Social Security employees. In each case, the person attempted to obtain personal information, such as a Social Security or bank account number, from the Social Security recipient.
“I find it very troubling that our most vulnerable citizens are being targeted by these unscrupulous people,” Commissioner Barnhart stated. “I caution everyone to be extremely careful about releasing personal information.”
The perpetrators, who identify themselves as Social Security employees, have used a variety of tactics to obtain personal information. In one instance, the caller said the Agency was experiencing a power outage and needed to verify the person’s information. In another, the caller posed as an employee who needed to verify the recipient’s direct deposit information.
In a third, the recipient is told their Social Security benefits are being cut because they have inherited a house from a relative; an event that would not result in a reduction of their Social Security benefit according to Commissioner Barnhart. To help perpetrate the fraud, the caller then places the recipient on hold and plays the same on-hold recordings used by Social Security. When the caller gets back on the line, the recipient is then told proceeds from the sale of the house will be sent to them if they pay the back taxes.
Acting Inspector General O’Carroll recommends people always take precautions when giving out personal information. “You should never provide your Social Security number or other personal information over the telephone unless you initiated the contact, or are confident of the person to whom you are speaking,” O’Carroll said. “If in doubt, do not release information without first verifying the validity of the call.” Barnhart and O’Carroll recommend contacting the local Social Security office or Social Security’s toll-free number at 1-800-772-1213 to verify the legitimacy of the call. (If you are deaf or hard of hearing, call Social Security's TTY number at 1-800-325-0778.)
Acting Inspector General O’Carroll notes that the Office of Inspector General (OIG) is working closely with the Agency to investigate all reports of suspicious activity. To report suspicious activity, please call the OIG Hotline at 1-800-269-0271. (If you are deaf or hard of hearing, call the OIG TTY number at 1-866-501-2101.) A Public Fraud Reporting form is also available online at OIG’s website: http://www.socialsecurity.gov/oig/.
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Social Security Delivers Most Popular Baby Names for 2003
Emily and Jacob Remain Top Baby Names in U.S.
For Mother’s Day, Jo Anne Barnhart, Commissioner of Social Security, announced the top baby names in the United States for 2003.
“Each year, Social Security produces the most popular baby names list based on all Social Security card applications for children born the previous year,” said Commissioner Barnhart. “Emily and Jacob are again the top baby names for 2003.”
Please click on the Most Popular Baby Names link at Social Security’s website -- www.socialsecurity.gov -- to see the top baby names for 2003. The top ten boys and girls names for 2003 are:
Emily and Jacob have become entrenched atop the list. Emily has been the most popular female name each year since 1996. Jacob has been the top male name since 1999. New to the top ten this year are Anthony and Elizabeth.
A list of the 1,000 most popular baby names for 2003, as well as the most popular baby names for each state, can be found by clicking the link to the Most Popular Baby Names.
Social Security started compiling baby name lists in 1997. Today, the Social Security website offers lists of baby names for each year since 1880.
Social Security’s website -- www.socialsecurity.gov -- has a variety of online services that allow people to access information and conduct business with Social Security from the convenience of their computers at any time.
People can apply online for Social Security retirement, spouse’s and disability benefits at www.socialsecurity.gov/applytoretire. Other online services allow people to find out if they may be eligible for benefits or locate their local Social Security office. Individuals who are receiving benefits may use the website to change their address or request a replacement Medicare card. As more and more people conduct business via the Internet, these online services save significant time and effort.
Social Security also offers online benefits planners at www.socialsecurity.gov/planners. Each planner--retirement, disability and survivors--contains valuable information about the benefits available and factors that can affect people. The planner’s three online calculators also allow individuals to compute estimates of their future retirement benefits and current disability and survivors benefits.
The website also offers a wealth of information about all Social Security programs through online publications and a “Frequently Asked Questions” section.
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Social Security Announces $6.6 Million In HOPE Awards For Assistance To The Homeless
The Social Security Administration is awarding $6.6 million in funding to assist eligible chronic homeless individuals apply for Supplemental Security Income (SSI) and Social Security disability benefits. These Homeless Outreach Projects and Evaluation (HOPE) awards are part of the Bush Administration’s commitment to end chronic homelessness in the next decade.
“Many homeless individuals suffer from a range of disabling conditions which may prevent them from availing themselves of services that may assist them,” said Jo Anne Barnhart, Commissioner of Social Security. “Social Security is committed, through outreach and assistance, to identifying and removing the unique barriers to the disability application process sometimes encountered by homeless individuals. We share President Bush’s commitment by doing our part to help end chronic homelessness in the United States.”
The target population for these funded projects is homeless individuals who are members of under-served groups, which may include people with severe and persistent mental illness, HIV infection, limited English proficiency, multiple and co-occurring disorders or cognitive impairments, as well as homeless veterans with disabilities. Through these awards, Social Security hopes to achieve faster claim decisions and higher allowance rates for those homeless individuals who are eligible for disability benefits. Staff of organizations awarded funding will receive training to improve their knowledge of Social Security’s disability programs and application process.
“Through its network of over 1300 field offices, Social Security is uniquely positioned to provide assistance to homeless individuals,” said Commissioner Barnhart. “Disability benefits can help homeless individuals to obtain housing, and also provide critical linkage to medical coverage.”
The purpose of this assistance to disabled homeless individuals is to improve their quality of life, especially in achieving full community integration, attaining stable housing and promoting recovery and employment.
Attached is a list of the HOPE applicants approved for funding.
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2004 Trustees Report - Little Change in Long Term Solvency of Social Security
The 2004 Social Security Trustees Report shows little change in the projected financial status of the Social Security program over last year. And again this year, the Social Security Board of Trustees states that, absent changes, Social Security’s currently scheduled benefits are not sustainable over the long term.
In the 2004 Annual Report to Congress, the Trustees announced:
The projected point at which tax revenues will fall below program costs comes in 2018 -- the same as the estimate in last year’s report.
The projected point at which the Trust Funds will be exhausted comes in 2042 -- also the same as the estimate in last year’s report.
The projected actuarial deficit over the 75-year long-range period is 1.89 percent of taxable payroll.
Over the 75-year period, the Trust Funds require additional revenue equivalent to $3.7 trillion in today’s dollars to pay all scheduled benefits. This unfunded obligation grew $200 billion from last year.
“I want to assure those already receiving Social Security benefits – as well as those who are close to retirement – that your benefits are secure,” said Jo Anne Barnhart, Commissioner of Social Security. “Reaching agreement on an appropriate solution to Social Security’s long-term financing challenges will require Congress and the President working together in a bipartisan manner.”
Other highlights of the Trustees Report include:
Income to the combined Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds amounted to $632 billion in 2003.
During the year, an estimated 154 million people had earnings covered by Social Security and paid payroll taxes.
The Trust Funds paid benefits of more than $470 billion in calendar year 2003. There were 47 million beneficiaries at the end of the calendar year.
The cost of $4.6 billion to administer the program continues to be a very low 0.7 percent of total income.
Total expenditures from the combined OASDI Trust Funds amounted to $479 billion in 2003.
The assets of the combined OASDI Trust Funds increased by $153 billion in 2003 to a total of $1.5 trillion.
- Interest earned on the invested assets of the combined Trust Funds was $85 billion in 2003. The combined Trust Fund assets earned interest at an effective annual rate of 6.0 percent.
The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: John W. Snow, Secretary of the Treasury and Managing Trustee; Jo Anne Barnhart, Commissioner of Social Security; Tommy G. Thompson, Secretary of Health and Human Services; and Elaine L. Chao, Secretary of Labor. The other two members, appointed by the President and confirmed by the Senate, are John L. Palmer and Thomas R. Saving.
The 2004 Trustees Report is posted at http://www.socialsecurity.gov/OACT/TR/TR04/.
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United States and Japan Sign Social Security Agreement
Agreement to Benefit U.S. Workers and Employers
Jo Anne Barnhart, Commissioner of Social Security, signed an agreement today with Japanese Ambassador Ryozo Kato that will remove from U.S. citizens working for U.S. companies in Japan the burden of paying social security taxes to both countries. The agreement also will remove the double taxation requirement for Japanese citizens working for Japanese companies in the United States. “This agreement eliminates a serious and unnecessary impediment to American and Japanese businesses and their employees,” Commissioner Barnhart stated. “Just as important, it promotes equity and fairness for workers who divide their careers between our two countries.”
Currently, U.S. companies that employ U.S. citizens in Japan are required to contribute to both the U.S. and Japanese social security systems. When the agreement takes effect, U.S. and Japanese employers and their employees will contribute to either the U.S. or Japanese social security systems, but not both. This will result in approximately 15,600 U.S. workers and their employers sharing in tax savings of $632 million over the first five years of the agreement.
The agreement also will improve social security protection for people who work in both countries. At present, some workers who have divided their careers between the United States and Japan fail to qualify for social security benefits from one or both countries because they do not meet minimum eligibility requirements. Under the agreement it will be possible for workers and their family members to qualify for pro-rated U.S. or Japanese benefits based on combined credits from both countries. This will result in approximately 24,000 U.S. and Japanese workers receiving benefits after the first five years of the agreement.
The agreement must be reviewed by Congress and approved by the Japanese Diet before it can take effect. The United States has similar social security agreements with 20 other countries, including Australia, Canada, Chile, South Korea, and nearly every country in Western Europe.
NOTE TO CORRESPONDENTS: A fact sheet providing more information about the Social Security agreement between the U.S. and Japan is attached. To find out more about agreements with other countries go to http://www.socialsecurity.gov/international/.
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