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2001 Social Security Changes

January 2001

Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 1999 through the third quarter of 2000, Social Security beneficiaries and Supplemental Security Income (SSI) recipients will receive a 3.5 percent COLA for 2001. Other important 2001 Social Security information is as follows:
Tax Rate: 2000 2001
Employee 7.65% 7.65%
Self-Employed 15.30% 15.30%
NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable maximum taxable amount (see below). The Medicare portion (HI) is 1.45% on all earnings.
Maximum Earnings Taxable: 2000 2001
Social Security (OASDI only) $76,200 $80,400
Medicare (HI only) N o L i m i t
  2000 2001
Quarter of Coverage: $780 $830
Retirement Earnings Test Exempt Amounts:
As of January 2000, the Retirement Earnings Test has been eliminated for individuals age 65-69. It remains in effect for those ages 62 through 64. A modified test applies for the year an individual reaches age 65. (The Senior Citizens’ Freedom To Work Act of 2000, signed into law by President Clinton on April 7, 2000.)
  2000 2001
Year individual reaches 65

NOTE: Applies only to earnings for months prior to attaining age 65. One dollar in benefits will be withheld for every $3 in earnings above the limit. There is no limit on earnings beginning the month an individual attains age 65.
Under age 65

NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
Maximum Social Security Benefit: Worker Retiring at Age 65 in January of 2000 and 2001
  $1,433/mo. $1,536/mo.
SSI Federal Payment Standard: 2000 2001
Individual $512/mo. $530/mo.
Couple $769/mo. $796/mo.
SSI Resources Limits: 2000 2001
Individual $2,000 $2,000
Couple $3,000 $3,000
Estimated Average Monthly
Social Security Benefits:
Before and After the December 2000 COLA:
3.5% COLA
3.5% COLA
All Retired Workers $ 816 $ 845
Aged Couple, Both Receiving Benefits $1,363 $1,410
Widowed Mother and Two Children $1,639 $1,696
Aged Widow(er) Alone $ 783 $ 811
Disabled Worker, Spouse and
One or More Children
$1,266 $1,310
All Disabled Workers $ 759 $ 786

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