Here’s a look at some of the changes to Social Security that go into effect this year:
Higher Payroll Tax Cap:
The payroll tax cap has increased by $3,600. Workers who earn more than $113,700 in 2013 don’t need to pay Social Security taxes on that income
More Services Available Online:
It’s no longer necessary to wait in line at the Social Security office to start your payments. In 2012, workers could access their Social Security statements online for the first time, including earnings history and expected payments. In 2013, the Social Security Administration added online services including access to benefit verification and payment history. Retirees are also able to change their address and add or change direct deposit information.
Paper Check are Ending:
As of Friday, March 1, the Treasury Department will no longer mail paper checks. Retirees will be required to choose to either have their Social Security payments directly deposited into a bank or credit union or loaded onto a prepaid Direct Express Debit MasterCard. Since 2011, new Social Security beneficiaries have been required to choose an electronic payment option. Approximately 93% of recipients already receive payments electronically.
Reduced Office Hours:
With more services moving online it makes sense that offices are reducing hours. Since November 2012, offices have been closing 30 minutes early each day and on January 2 they began closing at noon on Wednesdays.
Higher Earnings Limit:
Those individuals who are 62-66 years old and working while collecting Social Security benefits may see part or all of their benefits temporarily withheld. People in this group can earn up to $15,120, after which $1 in benefits will be withheld for every $2 of income above the limit. If you turn 66 this year you can earn up to $40,080 and then $1 in benefits is withheld for every $3 over the earnings limit. Once you’re older than 66 the limits no longer apply. And benefits may be recalculated at 66 to reflect the withheld benefits and continued earnings.
Bigger Social Security Payments:
In January 2013 beneficiaries began receiving payments that were 1.7% larger. This cost of living adjustment increased the average Social Security benefit from $1,240 to $1,261.
Payroll Tax Cut Ends:
This is probably the change you’ve heard most about! As of 2013 workers have resumed contributing 6.2% of their earnings to Social Security. The 4.2% rate was in effect from 2011 until 2012 and expired as part of the “Fiscal Cliff” deal.
Oasis Solutions Group provides service, support and training for HR and Payroll software including Sage HRMS, Empower Software, Clarity by Paymate and Sage Abra Suite. If you need assistance with your Human Resources Management Software contact Christine Ashley at Christine@oasisky.com or 502-429-6902 ext 237