Social Security Benefits to Rise 5.4% : Retirees: The boost is the biggest in 8 years. Also going up is the taxable wage base, with maximum payments increasing to $4,085.10 next year.

The nation’s 40 million Social Security beneficiaries will receive a 5.4% cost-of-living increase in January, the biggest boost in eight years, the government announced Thursday.

The automatic raises, which have been linked to the consumer price index for the last 15 years, have enabled millions of elderly Americans to avoid the worst ravages of inflation.

The average monthly benefit for retired workers will rise to $602 with the Jan. 3 check, up from $571 this year. The average retirement check for a couple will climb to $1,022 monthly from $970.

The maximum benefit for a worker retiring next year at age 65 will be $1,022 a month, an increase of $47.

January’s payment increase will be the biggest percentage jump since 1982, when the benefit rose 7.4%. This year’s raise was 4.7%.

The new benefit figure was disclosed Thursday after the government issued September’s inflation figure measuring the cost of living for average wage earners. The inflation adjustment for Social Security was calculated by measuring the advance in the consumer price index from the third quarter of 1989 to the same period this year.

The 5.4% cost-of-living adjustment will also raise the pensions of retired federal civil servants and former military personnel.

Two million persons covered by Supplemental Security Income, a special welfare program for the aged, blind and disabled, also will receive the increase. The maximum SSI payment for an individual will rise to $407 from $386. The maximum payment for a couple will rise to $610 from $579.

For Social Security and SSI beneficiaries, “this cost of living adjustment will be their assurance that those checks will continue to allow them to pay for needed goods and services,” Social Security Commissioner Gwendolyn S. King said.

Social Security payments are financed by the taxes of 132 million full- and part-time workers. The 5.4% rise in benefits brings a similar increase in the wage base on which taxes are levied to pay for Social Security and Medicare.

Workers and their employers will each pay taxes of 7.65% on wages of up to $53,400 next year, compared with $51,300 now. Maximum taxes will crack the $4,000 barrier for the first time, reaching $4,085.10 next year--an increase of $160.65.

The increase will affect 9.8 million workers, those whose salaries exceed $51,300.

The payroll tax, totaling 7.65%, includes 1.45% to pay for Medicare, which helps pay doctor and hospital bills for persons over 65 and disabled persons of all ages.

The deficit reduction plan being prepared by Congress seems certain to include an increase in the wage base subject to the 1.45% Medicare tax. But the exact amount will not be determined until Senate and House conferees complete the detailed work on the budget package.

The inflation figures issued Thursday also help determine the monthly insurance premiums paid by beneficiaries for Medicare Part B, which helps pay doctor bills. The current charge is $28.60 a month, an amount deducted from beneficiaries’ Social Security checks.

But the precise sum for next year has not been determined yet because Congress is still considering changes in the premiums to help reduce the federal deficit.

The Social Security Administration also announced new standards on permissible earnings for persons collecting retirement benefits. Persons under 65 will be allowed to earn $7,080 next year, or $590 a month, without any loss of Social Security retirement benefits. For every additional $2 in earnings above the ceiling, they will lose $1 in benefits.

Persons between 65 and 69 will be allowed to earn $9,720 a year, or $810 a month, without any penalty. For every additional $3 in earnings, they will lose $1 in benefits.

Persons 70 and over may earn unlimited amounts of money without suffering any loss of Social Security benefits.

The automatic adjustments for inflation have helped older Americans avoid economic deprivation. The poverty rate among Americans over 65, historically among the poorest groups in the country, has fallen to 11.4%, compared with 12.8% for the general population.