Social Security Announces 4.1% Benefit Increase for 2006
[November 2, 2005]
Donald N. Freedman

Monthly Social Security benefits will increase 4.1% on the basis of the annual cost-of-living adjustment required by law, starting with payments made in January 2006. However, the increase will be partially offset by an increase in the Medicare Part B premium which is increasing from $78.20 to $88.50 per month. (See related article on our website.) Gratefully, as Social Security notes in its News Release on the COLA increase (dated 10/14/05) , "no one's Social Security benefit will decrease [from 2005 levels] as a result of the 2006 Medicare Part B premium increase."

In the same News Release, Social Security announced that Supplemental Security Income benefits will also increase by 4.1% in 2006. This is true, however, only with respect to the federal portion of the SSI benefit. Most states, including Massachusetts, supplement the federal benefit to some extent. The federal portion varies with living arrangement but is the same from state to state. The state portion in Massachusetts varies not only with living arrangement, but also (except for assisted living) as to whether the individual is aged, disabled or blind.

In 2005, federal benefits for individual ranged from $386 to $579 per month. The Massachusetts state supplement (except for assisted living) ranged from $30.40 (for a disabled individual in a shared living arrangement) to $342.74 (for a blind individual in the household of another). The state portion is not subject to a COLA requirement, and thus the effective increase in the overall benefit will be lower than 4.1% in all cases.

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