Social Security Reform 2023 – If the Social Security Administration is successful in implementing a Social Security reform proposed modification to how benefits are calculated, recipients of Supplemental Security Income (SSI) may soon receive larger monthly payments.
Based on the economic history of a younger spouse, a senior may apply for Social Security spousal benefits; however, the younger spouse must already be a beneficiary. The brief response to our second reader query in today’s mailbag is provided above. (Image courtesy of www.barrons.com)
If the Social Security Administration is successful in implementing a proposed Social Security reform to how benefits are calculated, recipients of Supplemental Security Income (SSI) may soon receive larger monthly payments.
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In-kind support and maintenance (ISM), which is unearned income in the form of food and/or shelter, would no longer be included in the computation under the Social Security reform proposed regulation, which was published in the Federal Register in February. The plan eliminates the need that SSI applicants and beneficiaries disclose information regarding their food expenses for the agency to take into account in its ISM calculations.
If the Social Security Administration is successful in implementing a proposed Social Security reform to how benefits are calculated, recipients of Supplemental Security Income (SSI) may soon receive larger monthly payments. (Photo by https://www.washingtonpost.com/)
According to the Social Security Administration, SSI benefits are now cut by one-third if an individual or couple is receiving food and housing assistance from another person while residing in their house. Any food, housing, or both that is provided to someone or is paid for by someone else is considered “support” in this context.
The measures being worked out by lawmakers to strengthen Social Security’s failing trust funds could impact how much money Americans get in benefits.
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Generally speaking, those two major changes are the raising of the retirement age and the raising of the annual wage threshold at which the Social Security payroll tax is applicable.
A 20% pension loss could result from raising the retirement age.
Based on adjustments made in 1983, the Social Security full retirement age is gradually rising to 67.
The full retirement age may once more be increased by lawmakers to 70.
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This may mean that Americans would have to wait until they were 70 to begin receiving their full retirement benefits. (Current rules have set the full retirement age at 66 to 67, depending on date of birth.)
It might also entail raising the Social Security payroll tax rate for Americans with high incomes. Currently, only salaries up to $160,200 are subject to that tax.
This may mean that Americans would have to wait until they were 70 to begin receiving their full retirement benefits. (Current rules have set the full retirement age at 66 to 67, depending on date of birth.) (Photo by https://www.marketwatch.com/)
Payroll tax adjustments may aim to reduce wealth disparity.
Payroll taxes for Social Security are due on earnings up to $160,200 in 2023. For both employers and employees, the tax rate is 6.2%; for self-employed individuals, it is 12.4%.
Warren and Sanders want to reinstate the Social Security payroll tax on earnings over $250,000. They also want to impose a 12.4% tax on certain corporate and investment income.
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The Economic Policy Institute advises lawmakers to at least take into account raising the earnings threshold to a point where 90% of wages are subject to Social Security taxes.
Although Social Security payments are designed to be universal, Arnone noted that people’s actual requirements fluctuate depending on their location, color, age, and other demographic factors. Inflation typically has a greater influence on older people than on younger people.
According to Disability Scoop, the draft regulation would be open for public discussion until April 17, 2023, before it is finalized. There was no timetable provided for when it might be authorized and implemented.
