(Reuters) - Benefits paid to nearly 63 million U.S. Social Security recipients will rise by 1.5 percent in 2014, the Social Security Administration said on Wednesday.
That will add $19 to the average monthly Social Security benefit next year, putting it at $1,294, the administration said.
The cost-of-living increase will take effect in January for the 57 million seniors receiving Social Security benefits. It will start on December 31 for the 8 million disabled people who receive benefits under the Supplemental Security Income program, the administration said.
The increase is based on the rate of inflation, which has been tame this year. Benefits went up by 1.7 percent in 2013 and 3.6 percent in 2012, but did not rise at all in 2011 and 2010.
The cap on earnings subject to Social Security taxes will also rise in January, based on the increase in average wages, the administration said.
Workers will pay Social Security taxes on earnings up to $117,000 next year, compared with a cap of $113,700 this year.
Of the estimated 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes as a result of the increase in the taxable maximum, the administration said.
(Reporting by Jane Sutton in Miami; editing by Gunna Dickson)
- Social Security Administration
- Supplemental Security Income