Social Security is again announcing a big new change for 2025

Based on the latest news Social Security Administration has re-announced major changes for 2025. According to the federal agency, they will make significant reforms in early 2025 to help its beneficiaries cope with rising inflation and provide competitive wages. One of the most significant changes that will happen as soon as 2025 starts is the increase in the taxable maximum, which is currently $168,600 annually, but will be raised to help taxpayers. The monthly income earned by an employee is known as the taxable maximum, and any income that falls below this limit will not be taxed in 2025. This is the annual income limit to which payroll taxes apply.

Social Security’s new change will affect retirees in 2025

As Social Security stated, the annual taxable maximum will be $176,100 starting January 1, 2025. Anything received over that threshold must be recorded, and only income up to that amount will be paid. The SSA also highlighted that in order to keep pace with increases in the average wage, they raise this sum every year. The Medicare tax has no upper income limit, so you must pay Medicare tax on all of your income. Furthermore, Social Security will make significant adjustments in the coming year, including an increase in Cost of Living Adjustment (COLA) to 2.5% for all recipients under the Administration. Given this annual increase, here are all the new payment amounts available to retirees, survivors, the disabled and recipients of the Supplemental Security Income (SSI) program.

It is important to note that these new payment amounts will only come into effect from January 2025. This means that recipients from pension, survivors and disability insurance (RSDI) program will receive their increased Social Security check until January 3 if they applied for benefits before May 1997, and January 8 if they applied for benefits after that date and were born between the 1st and 10th of a given month . To get a general idea of upcoming payment amount in Januaryplease see the following information:

As you can see, January will deliver four payments to RSDI recipients and an additional payment to SSI recipients. However, SSI recipients will not receive their regular payment on January 1st because it falls on a holiday. For this reason, recipients of the Supplemental Security Income (SSI) program will be the only recipients to receive their increase payments this year, on December 31st. Since the payment schedule can be difficult to understand, remember that you can always access your My Social Security account, where you can download statements and even request additional Social Security information.

Other Social Security changes that recipients should be aware of

1. A new rule expands the definition of a public assistance household to include SNAP benefits that affect benefits for SSI applicants living in these households, since help from other household members can be counted as income.
2. Food donations will no longer be considered unearned income. Beginning in September, food donations will no longer be considered in the analysis of the in-kind support and maintenance (ISM) category for SSI recipients. Instead, only low-cost or free housing will be allowed. This change will benefit the 9% of SSI recipients whose payments have been reduced due to food donations by ensuring that their payments do not vary as a result of food donations.