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New things on the horizon for SSD in 2017

There are several changes happening in the Social Security system starting at the first of the year. Although many of these changes apply to retirement benefits, Newark, New Jersey, residents who are suffering from a disability should pay careful attention as well, as some of these changes also affect Social Security Disability benefits.

Perhaps the most important change is that it will be slightly easier for low income people to qualify for Supplemental Security Income (SSI). Currently, someone who is not blind but disabled has to earn less than $1,130 a month before they qualify for SSI benefits. The blind's threshold is $1,820 a month.

In 2017, these thresholds will move to $1,170 a month and $1,950 a month, respectively. This means a person who in 2016 might have narrowly missed qualifying for SSI due to income requirements may be able to receive the benefit in 2017.

Another change that might be less noticeable is that the value of a "work credit" is rising slightly, from $1,260 to $1,300. As a review, a "work credit" measures how much a person has put in to the Social Security system and thus how much a person will be able to withdraw. In 2017, a person will earn the maximum 4 work credits annually if he or she earns $5,200 a year.

The work credit system applies not only to retirement benefits but also to those who qualify for SSDI income, a disability benefit based on how much a person has put in to the system.

It is also worth noting that people currently pay a Social Security payroll tax on the first $118,500 they earn. In 2017, people will pay on the first $127,200 they earn. Whether this will improve the financial health of the overall system is unclear. Also, as has been previously reported on this blog, recipients of SSI will see a slight increase in their monthly benefits.

Source: The Motley Fool, "7 changes to Social Security in 2017," Sean Williams, Oct. 31, 2016.

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