Social Security Benefits Get 2.4% Cost-of-Living Adjustment for 2000

Social Security benefits will rise 2.4% in January, the largest cost-of-living increase in three years, the Social Security Administration announced Tuesday.

The average monthly benefit amount will go from $785 to $804. For the average elderly couple, the benefit will increase $32, to $1,348 each month.

The decision continues a 1990s trend of modest increases. Benefits are adjusted automatically each year based on the rise in the consumer price index from the third quarter of one year through the corresponding period of the next. The 2000 increase will be nearly double 1999’s 1.3%.

The annual cost-of-living adjustment, or COLA, will also affect other beneficiaries and payments:

* Benefits for 6.6 million disabled workers and families whose primary wage earners have died will also rise 2.4%, as will benefits for more than 1.6 million government retirees and families covered by civil service pensions.

* Working Americans also will contribute more to Social Security next year. The maximum amount of earnings subject to the Social Security payroll tax will increase to $76,200 from $72,600, the government said. That means the maximum Social Security tax paid by workers next year will be $4,724.40, an amount employers are required by law to match.

* The maximum amount a beneficiary under 65 may earn without losing any Social Security benefits will increase from $9,600 this year to $10,080 in 2000. The maximum amount a beneficiary age 65 to 69 may earn without losing any Social Security benefits will increase to $17,000 from $15,500.

In a separate announcement, the Department of Health and Human Services said the monthly Medicare premium deducted from most Social Security checks for insurance coverage of physician services and hospital outpatient care will remain $45.50.