Every year, the Social Security Administration and Medicare announce the new changes for each program. There are some positives this year. The following are the 2009 changes:

The Social Security’s cost of living (COLA) benefit for 2009 is 5.8 prcent - the highest increase in 25 years. This means an average monthly increase of $63. The COLA is based on the 3rd quarter to 3rd quarter annual change in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The U.S. Department of Labor’s Bureau of Labor Statistics determines the CPI-W. The December 2008 Social Security payment paid in January 2009 was the first affected by the increase.

For those who pay Social Security taxes, the increase for the maximum earnings amount subject to this tax will rise from $102,000 to $106,800. The maximum monthly Social Security benefit for those who reach full retirement in 2009 is $2,323. The federal SSI payment is $674 for an individual and $1,011 for a couple.

An additional wage-indexed Social Security program amount is the exempt amount under the Retirement Earnings test for those who have reached their normal retirement age according to the Social Security Administration. For those workers born before 1938, the normal retirement age is 65, but this gradually rises to 67 for those workers born after 1959.

The exempt amount for those not reaching their normal retirement age during the year will increase from $13,560 in 2008 to $14,160. If normal retirement age is reached in 2009, the exempt amount is $37,680 for earnings in the months before reaching normal retirement age. As of 2000, a Social Security beneficiary who has reached their normal retirement age can now earn unlimited income without any reduction to their benefits.

The other positive this year is that the Part B premium will not increase for most Medicare enrollees (remaining at $96.40 per month) — this is the first since 2000. But there are exceptions! It does not apply for seniors in the top 5 percent income bracket. For individuals with incomes of $85,000 to $107,000 and married couples with joint incomes of $170,000 to $214,000, the Part B premium will increase to $134.90 per month. For individuals earning $107,000 to $160,000 and married couples with joint incomes of $214,000 to $320,000, the premium will be $192.70 per month. Individuals with incomes of $160,000 to $213,000 and married couples with joint income of $320,000 to $426,000 will pay $250.50 per month. For individuals earning over $213,000 and married couples with joint income above $426,000 will pay $308.30.

Additional changes affect the amount of earnings needed to receive a coverage credit. These credits were known as “quarters of coverage”, but since 1978, the credits are based on annual earnings. Everyone born in 1929 or later needs 40 Social Security credits to be eligible for retirement benefits. Since it’s possible to earn four credits per year, it generally takes at least 10 years to become eligible.

Medicare benefits begin at age 65. For those on Social Security disability benefits, Medicare can begin at an earlier age. Part A inpatient hospital deductible for every benefit period will increase from $1024 in 2008 to $1,068. The benefit period is the way Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you are admitted to a hospital or SNF. The period ends when you haven’t received any hospital or skilled care for 60 consecutive days. There is no limit to the number of benefit periods you can access.

After the initial 60 days, the coinsurance amount for days 61-90 of hospitalization during any benefit period will rise from $256 to $267 per day. The coinsurance amount for each of 60 lifetime reserve days will rise from $512 to $534 per day. The daily coinsurance amount for days 21-100 in a skilled nursing facility will rise from $128 to $133.30.

IRA maximum contributions did not increase for 2009. The dollar limit contribution to an IRA is $5,000 for ages 49 and below. For those over age 50, the catch-up provision allows an additional $1,000.

For more information about Social Security, call 1-800-772-1213 or visit www.social security.gov. For Medicare, call 1-800-Medicare or visit www.medicare.gov.

Mary Garza Cummings is a freelance writer. The Town Crier does not warrant the information as valid. It is the responsibility of the reader to ensure validity of the information. If you have questions or comments, email askseniorfocus@aol.com