On October 30, 2013, two weeks late due to the government shutdown, the Social Security Administration announced the annual cost of living adjustment (COLA) for 2014. COLA is based on the increase in the Consumer Price Index (CPI-W), produced by the Bureau of Labor Statistics from the third quarter of 2012 through the third quarter of 2013.
In 2014, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.5% COLA. For SSI beneficiaries, this means an increase from $710 a month to $721. The average retired worker receiving Social Security in 2014 will receive $1,294 a month, while the average disabled worker will receive $1,148 per month.
In addition to announcing the increased COLA, Social Security also announced an increase in the cap on earnings subject to Social Security taxes. Earnings up to $117,000 in 2014 will be subject to Social Security taxes. This is up $3,300 from 2013. Approximately six percent of workers have earnings that exceed this cap.
An increase in Social Security COLA also means an upward adjustment to the Medicaid eligibility income cap for individuals in states using the income cap, such as Florida, to determine eligibility for Medicaid long term care services. The income cap for individuals is three times the federal benefit rate for 2014 or $2,163 per month, up from $2,130 in 2013.
For more information on changes to Social Social due to the COLA visit 2014 Social Security Changes.
